Share Premium Accounts vs. Paid in Capital

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Share premium accounts are usually found on the balance sheet. Find out the differences between share premium accounts and paid in capital with help from a longtime and experienced accountant in this free video clip.

Part of the Video Series: Understanding Finance & Accounting
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Video Transcript

Hi, I'm Lori Greer from Atlanta, Georgia and I'm here to discuss share premium accounts versus paid in capital. Shared premium accounts are usually found on the balance sheet. This is the account to which the amount of money paid or promised to be paid by a shareholder for a share is credited to only if the shareholder paid more than the cost of the share. The share premium account may be used to issue bonus shares or write off equity-related expenses like underwriting costs. Paid in capital is the amount of capital paid in by investors during common or preferred stock issuances including the par value of the shares themselves. Paid in capital represents the funds raised by the business from equity and not from ongoing operations. I'm Lori Greer from Atlanta, Georgia and we just discussed share premium accounts versus paid in capital.

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