how does paid in capital increase or decrease 
any new issuance of preferred or common shares may increase the paid in capital as the excess value is recorded paid in capital can be reduced with share repurchases the bottom lineadditional paid in capital represents the amount of money investors contribute to a company above the stated par value of its stock it is the equity portion of a company s balance sheet that includes funds received from issuing stock at a premium this capital reflects the difference between the issue price of the shares and their par value allowing companies to generate additional funds for expansion research or other business activities correction may 13 2023 a previous version of this article incorrectly stated cash is recorded to the equity section of the balance sheet as opposed to the asset section 