Business, Legal & Accounting Glossary
Balance sheet item under shareholders’ equity. Increases by the value above an original par value per share that newly issued shares are sold for. The amount of the raised equity capital that fall within the original par value per share increase the stock capital line item.
Capital surplus, also known as share premium, is the surplus that results when common stock is sold for more than its par value. Capital surplus is defined as equity or net value that is not otherwise classified as capital stock or retained earnings.
Previously, capital surplus was defined as the account Paid-in Capital in Excess of Par – Common Stock and the account Premium on Common Stock. In today’s balance sheets, capital surplus is referred to as paid-in surplus or paid-in capital [in excess of par].
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This glossary post was last updated: 25th January, 2022 | 0 Views.