what is paid in capital 
paid in capital is the total amount of cash that a company has received in exchange for its common or preferred stock issues in a company balance sheet paid in capital will appear in a line item listed under shareholders equity or stockholders equity it is often shown alongside a line item for additional paid in capital also known as the contributed surplus the figure for paid in capital will include the par value of the shares plus amounts paid in excess of par value paid in capital represents the money raised by the business through selling its equity rather than from ongoing business operations understanding paid in capitalfor sales of common stock paid in capital also referred to as contributed capital consists of a stock s par value plus any amount paid in excess of par value in contrast additional paid in capital refers only to the amount of capital in excess of par value or the premium paid by investors in return for the shares issued to them in modern times most common shares are assigned token par values of a few pennies because of this additional paid in capital tends to be essentially representative of the total paid in capital figure and is sometimes shown by itself on the balance sheet preferred shares sometimes have par values that are more than marginal additional paid in capital can provide a significant part of a young company s resources before earnings start accumulating through multiple profitable years it is an important layer of defense against potential business losses if retained earnings show a deficit short of the retirement of shares the account balance of paid in capital specifically the total par value and the amount of additional paid in capital should remain unchanged as a company carries on its business types of stock affecting paid in capitalthe balance sheet number on paid in capital may reflect transactions in common shares preferred shares treasury stock or some combination of all of these paid in capital is not a day to day revenue stream for a public company and its value does not fluctuate 