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Capital surplus, also called share premium, is an account which may appear on a corporation's balance sheet, as a component of shareholders' equity, which represents the amount the corporation raises on the issue of shares in excess of their par value (nominal value) of the shares (common stock).
For example, it could refer to the money that a company gets from potential investors, in addition to the stated (nominal or par) value of the stock, which coincides with the definition of additional paid-in capital, or paid-in capital in excess of par. One should be aware of the use of the term and the abbreviation, which can confuse.
Stock option expensing is a method of accounting for the value of share options, distributed as incentives to employees within the profit and loss reporting of a listed business. On the income statement, balance sheet, and cash flow statement the loss from the exercise is accounted for by noting the difference between the market price (if one ...
Preferred stock, share capital (or capital stock) and capital surplus (or additional paid-in capital) reflect original contributions to the business from its investors or organizers. Treasury stock appears as a contra-equity balance (an offset to equity) that reflects the amount that the business has paid to repurchase stock from shareholders.
Liquidating distributions are not paid solely out of the profits of the corporation. Instead, the entire amount of shareholders' equity is distributed. [2] When a company has more liabilities than assets, equity is negative and no liquidating distribution is made at all. This is usually the case in bankruptcy liquidations.
Operating surplus is a component of value added and GDP. The term "mixed income" is used when operating surplus cannot be distinguished from wage income, for example, in the case of sole proprietorships. Most of operating surplus will normally consist of gross profit income. In principle, it includes the (separately itemised) increase in the ...
Consumer surplus is an economic indicator which measures consumer benefits. [7] [10] [2] The price that consumers pay for a product is not greater than the price they desire to pay, and in this case there will be consumer surplus. For the supply side of economics, the general school of thought is that profit is meant to ensure shareholder yield.
In accounting, the share capital of a corporation is the nominal value of issued shares (that is, the sum of their par values, sometimes indicated on share certificates).). If the allocation price of shares is greater than the par value, as in a rights issue, the shares are said to be sold at a premium (variously called share premium, additional paid-in capital or paid-in capital in excess of p