What is "paid-in capital in excess of par"?

Question

On the balance sheet of a public company , a part of the total equity is usually "paid-in capital in excess of par". What does this represent, and what does it mean?

Thanks!

Answer 1

It doesn't mean anything. Just add them together to get the total shareholder's equity.

OK, it does mean something in some states for a company that is losing money and wants to pay dividends, but you don't want to own companies like that anyway. Par is an obsolete concept from a hundred years ago. Selling newly issued stock at a price below par, where owners can be assessed the difference by the creditors is illegal now.

Answer 2

It means the money of stockholders paid in as the company's capital higher than par value. Par value means the value specifically stated as an amount per share when incorporating a company.

The excess of par still belong to the stockholders and forms part of the capital sum. In England, this is called "Share Premium".

Answer 3

When someones buys shares or a bond or something from the company for more than what it is valued on the books (at a premium). Paid in capital in excess of par is the difference between the amount the company collects and the stated value. For example

say 1 share in your company is worth 15$. But you sell the share for 18$. you know have 3$paid in capital in excess of par

Answer 4

Not all stock is issued with a par value. In the case you have an issue that does have a par value, when they make a public offering of the stock, it may be issued at a price above par. It is a value asset and part of the proprietorship.

Answer 5

stock is issued with a par value. If the stock is initially sold above par value, the excess amount goes into this account.

Answer 6

I think both of them means the same. It is the premium paid by the investor above the par value of an equity share. It appears in the balance sheet just below the equity capital(share premium as capital reserve). Refer more books for precise meaning. Thank you.