Ads end in 20 seconds
This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Accounting
Additional Paid-In Capital
The extra money investors paid above the par value when the company first issued its stock.
This account shows up in the equity section of the balance sheet. It represents the true amount investors were willing to pay for the stock beyond the tiny par value.It's like selling lemonade for $2 a cup when the legal sticker price is only 1 cent — the extra $1.99 goes into this account.
Real world: If a company issues stock with $0.01 par value for $50 per share, $49.99 of each share goes to Additional Paid-in Capital.
💡 Additional Paid-in Capital shows how much faith early investors had in the company — it's often one of the biggest numbers in equity.