Additional Paid-In Capital (APIC)
The amount investors paid for shares above their par value, recorded in the equity section of the balance sheet.
What is Additional Paid-In Capital?
Additional paid-in capital (APIC), also called capital surplus or share premium, is the excess amount that investors pay for stock above its par value when shares are issued or sold. Because par value is typically set very low (often $0.001 per share), virtually all proceeds from stock issuances are recorded as APIC. It appears in the equity section of the balance sheet alongside common stock, retained earnings, and treasury stock. APIC increases when the company issues new shares through an IPO, secondary offering, or employee stock compensation. Unlike retained earnings, which reflect accumulated profits, APIC represents direct capital contributions from shareholders.
Example
When Google went public in 2004 at $85 per share with a par value of $0.001, nearly the entire $1.67 billion raised from the IPO was recorded as additional paid-in capital. Today, Alphabet's APIC balance reflects decades of stock issuances and employee equity compensation.