Paid in capital also known as contributed capital. Paid in capital is the capital a company receives from investors on top of the par value of the stock. Simply stated, any money the company gets from investors over the stated value of the stock is known as paid in capital. For example, if an investor buys shares for $15/share from a company whose stock’s par value is stated at $10/share, the company’s paid in capital is $5 for each share sold.
Contributed capital must be listed under the owner’s equity portion of the balance sheet under either stated capital or paid in capital. The stated capital is the par value of the shares and paid in capital is any additional money paid to the company over the par value.
