What is Paid-Up Capital?
How Does Paid-Up Capital Work?
Let’s assume Company XYZ decides it needs to raise $10 million in
The company records the receipt of $10 million of on the asset side of its after the is complete. It also records the corresponding equity on the balance sheet. However, it breaks that $10 million up into two line items: the of the stock and anything over the par value of the stock.
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 (APIC). As this snippet from a Wal-Mart balance sheet shows, the company had almost $4 billion of APIC (numbers in billions).