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Line 1: {{Accounting}} '''Capital surplus''', also called '''share premium''', is aan ~~term~~account ~~that~~which ~~frequently~~may ~~appears~~appear ason a [[corporatiion]]'s [[balance sheet]] ~~item~~, as a component of [[shareholders' equity]]., ~~Capital~~which ~~surplus~~represents isthe ~~used~~amount tothe ~~account~~corporatiion ~~for~~raises ~~that~~on ~~amount~~the ~~which~~issue aof ~~[[company (law)\|firm]] raises~~shares in excess of ~~the~~their [[par value]] (nominal value) of the shares ([[common stock]]). This is called Additional paid in capital in US GAAP terminology but, additional paid in capital is not limited to share premium. It is a very broad concept and includes tax related and conversion related adjustments. Line 11: Some other scenarios for triggering a capital surplus include when the Government donates a piece of land to the company. The capital surplus/share premium account (SPA) is generally not distributable~~. However~~, ~~in restricted circumstances it~~but ~~can~~maybe beused ~~reduced~~to: * to write off the expenses/commission relating to the issue of those shares, or * to make a bonus issue of fully paid-up shares. It may also be used to account for any gains the firm may derive from selling [[treasury stock]], although this is less commonly seen.

Capital surplus: Difference between revisions