Paid-in Capital Meaning | Accounting Share

Accounting glossary · Understand, connect, apply

Paid-in capital is equity contributed by shareholders in exchange for shares, including amounts recorded as share capital and additional paid-in capital.

Example

Investors pay 50,000 for newly issued shares. The company records contributed equity rather than sales revenue.

Remember the difference

Paid-in capital differs from retained earnings, which arise from accumulated results less distributions and other adjustments.

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Updated 3 November 2026. Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.

Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.

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