Share Capital & Additional Paid-In Capital

Category

Balance Sheet

Units

Currency

US-GAAP elements

CommonStocksIncludingAdditionalPaidInCapitalCommonStockValueAdditionalPaidInCapital

Reference

Regulation S-X Rule 5-02.29 (Common stocks); Rule 5-02.30 (Other stockholders' equity)

Source

Reported in SEC EDGAR filings (US-GAAP XBRL taxonomy)

Share capital and additional paid-in capital (APIC) is the total amount a company has received from shareholders in exchange for its stock, as recorded in stockholders' equity. Share capital is the par or stated value of the shares issued, and APIC is everything received above that nominal amount. Together they are often called contributed capital.

Par value is usually a token amount, such as a fraction of a cent per share, so for most companies nearly all of the capital raised from shareholders sits in APIC.

Regulation S-X Rule 5-02.29 requires companies to show, for each class of common stock, the number of shares issued or outstanding and the dollar amount on the face of the balance sheet. Rule 5-02.30 requires additional paid-in capital as a separate caption within equity, but a note to that rule allows it to be combined with the stock caption it relates to. That is why some balance sheets show a single "common stock and additional paid-in capital" line. In XBRL, the combined amount is tagged CommonStocksIncludingAdditionalPaidInCapital, and the separate pieces are CommonStockValue and AdditionalPaidInCapital.

APIC grows with more than new share sales. Stock-based compensation expense is credited to APIC as awards vest, and shares issued for acquisitions, on the conversion of convertible securities, or through employee purchase plans also add to it. Companies that retire repurchased shares may charge part of the cost against APIC, while companies that hold them as treasury stock show the cost in a separate deduction instead. Preferred stock and its paid-in capital are usually reported separately from these common equity amounts.

Contributed capital shows how much of a company's equity came from owners rather than from retained profits. A company with large contributed capital and a big accumulated deficit has been funded mainly by investors, which is common for younger businesses. Steady growth in APIC without matching share issuance for cash usually reflects stock compensation, which is a source of dilution worth tracking alongside share count.