What is share capital in accounting?

The technical accounting definition of share capital is the par value of all equity securities, including common and preferred stock, sold to shareholders. However, people who are not accountants often include the price of the stock in excess of par value in the calculation of share capital.

Where is share capital reported on a balance sheet?

Share capital is reported by a company on its balance sheet in the shareholder's equity section. The information may be listed in separate line items depending on the source of the funds. These usually include a line for common stock, another for preferred stock, and a third for additional paid-in capital .

What is authorized share capital?

Authorized share capital is the maximum amount a company has been approved to raise in a public offering. A company may opt for a new offer of stock in order to increase the share capital on its balance sheet. Share capital is reported by a company on its balance sheet in the shareholder's equity section.

What does additional paid-in capital mean on a balance sheet?

On a balance sheet, the proceeds of stock sales are listed at their nominal par value while the "additional paid-in capital" line reflects the real price paid over par for the shares. The amount of share capital reported by a company includes only payments for purchases made directly from the company.