We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.
© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Paid-in-Surplus

Definition:

Extra money, more or less.

Paid in surplus is a balance sheet term: it represents the amount that investors have paid in shares above the par value of the shares. It only refers to shares bought directly from the company—not traded on the market. Usually, companies price the par value pretty low so a lot of money earned from a public offering is from paid in surplus. 

Example

A company's common shares have a par value of $1. The company prices these shares at $10 on the IPO. The paid-in surplus is the difference between the par value and the price, or $9. If the company sells one million shares, they put $9 million in the paid in surplus section on the balance sheet.