What it is:
How it works (Example):
Let’s assume that Company XYZ decides it needs to raise $10,000,000 inin order to build a new factory. It does this by issuing 100,000 of new at $100 per share.
The company records the receipt of $10,000,000 of equity on the balance sheet. However, it breaks that $10,000,000 up into two line items: the par value of the stock and anything over the par value of the stock.on the side of its after the is complete. It also records the additional corresponding
Traditionally, companies assign an arbitrary par value of $0.01 to each new share of stock. Anything over that, $9.99 in our example, is recorded as additional paid in capital (APIC). As this snippet from a Walmart balance sheet shows, the company had almost $4 billion of APIC (numbers in billions).
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