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Jun 25, 2025
6:03 AM
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The paid-in capital is recorded at the section of shareholders equity in the balance sheet. It is usually divided into two components: common stock (par value of issued share) and additional paid-in capital (value paid over par). This amount is the finances collected directly through investors during the issuance of stock. It is useful in the determination of the capital a firm has been able to raise without incurring debt. Unlike retained earnings, paid-in capital is also stable source of equity unlike retained earnings as it does not vary unless new shares are issued.
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