Your Ask Joey ™ Answer

What is additional paid-in capital (APIC)?

Additional paid-in capital is the incremental value that investors are willing to pay for the stock above the par value of shares issued.

For example, a company might have common stock with a par value of $5, but investors are willing to pay $20 for it. That $15 difference represents additional paid-in capital. The company would receive cash at the $20 per share, then common stock would be recorded at the $5 par value, and the remaining amount is plugged to APIC.

Back To All Questions

You might also be interested in...

  • Three Reasons to Become an Accountant

    If you’re someone who is intrigued by numbers, enjoys problem-solving and wants to help others, then accounting might be the perfect career for you. While some people may be put off by its unalluring reputation, accounting is an excellent career choice that has many benefits. In this article, we look at three of the reasons...

  • Qualified Retirement Planning: Tax Advantages & Disadvantages

    Home Advantages and Disadvantages of Tax-Free and Deferred-Tax Retirement Plans What are “qualified retirement plans” and how can they be effective for tax planning? Well, there are plenty of tax savings advantages to individuals contributing to tax-free retirement accounts, as well as tax-deferred retirement accounts. However, this doesn’t necessarily mean that there are no disadvantages...

  • CPA Evolution Survival Guide

    Download Your eBook by selecting the download icon in the top right-hand corner