Contributed capital là gì
Peggy James is a CPA with over 9 years of experience in accounting and finance, including corporate, nonprofit, và personal finance environments. She most recently worked at Duke University and is the owner of Peggy James, CPA, PLLC, serving small businesses, nonprofits, solopreneurs, freelancers, and individuals.
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What Is Contributed Capital?
Contributed capital, also known as paid-in capital, is the cash & other assets that shareholders have given a company in exchange for stock. Investors make capital contributions when a company issues equity shares based on a price that shareholders are willing to lớn pay for them. The total amount of contributed capital or paid-in-capital represents their stake or ownership in the company.
Contributed capital may also refer to lớn a company's balance sheet item listed under stockholders' equity, often shown alongside the balance sheet entry for additional paid-in capital.
Understanding Contributed Capital
Contributed capital is the total value of the stock that shareholders have bought directly from the issuing company. It includes the money from initial public offerings (IPOs), direct listings, direct public offerings, & secondary offerings—including issues of preferred stock. It also includes the receipt of fixed assets in exchange for stock & the reduction of a liability in exchange for stock.
Contributed capital can be compared withadditional paid-in capital,and the difference between the two values will equal the premium paid by investors over and above thepar valueof the company"s shares.The par value is merely an accounting value of each of the shares lớn be offered và is not equivalent to the market value that investors are willing to lớn pay.
When companies repurchase shares & return capital lớn shareholders, the shares bought back are listed at their repurchase price, which reduces shareholders' equity.
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Contributed capital, also known as paid-in capital, is the cash và other assets that shareholders have given a company in exchange for stock. This is the price that shareholders paid for their stake in the company.Contributed capital is reported in the shareholder’s equity section of the balance sheet & usually split into two different accounts: common stock & additional paid-in capital account.
Preferred sharessometimes have par values that are more than marginal, but most common shares today have par values of just a few pennies. Because of this, "additional paid-in capital" tends khổng lồ be representative of the total paid-in capital figure & is sometimes shown by itselfon the balance sheet.
Capital Contributions
It's important khổng lồ distinguish that capital contributions, which are an injection of cash into a company, can come in other forms besides the sale of equity shares. For example, an owner might take out a loan and use the proceeds to make a capital contribution to the company. Businesses can also receive capital contributions in the size of non-cash assets such as buildings và equipment. These scenarios are all types of capital contributions và increase owners' equity. However, the term contributed capital is typically reserved for the amount of money received from issuing shares & not other forms of capital contributions.
Calculating Contributed Capital
Contributed capital is reported in the shareholder’s equity section of the balance sheet và usually split into two different accounts: common stock và additional paid-in capital account. In other words, contributed capital includes the par value—or nominal value—of the stock, found in the common stock account, & the amount of money over & above the par value that shareholders were willing to pay for their shares—the giới thiệu premium—found in the additional paid-in capital account.
The common stock tài khoản is also known as tóm tắt capital account, and the additional paid-in capital account is also known as the nói qua premium account.
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Example of Contributed Capital
For example, a company issues 5,000 $1 par value shares khổng lồ investors. The investors pay $10 a share, so the company raises $50,000 in equity capital. As a result, the company records $5,000 to lớn the common stock account and $45,000 lớn the paid-in capital in excess of par. Both of these accounts added together equal the total amount stockholders were willing khổng lồ pay for their shares. In other words, the contributed capital equals $50,000.
