Additional Paid-In Capital (APIC)
Also called APIC
Additional Paid-In Capital is a line under Shareholders’ Equity on the Balance Sheet that represents the amount investors pay for a company’s stock above its par value, reflecting the premium received from issuing shares.
Example
A company issues 1,000,000 shares of common stock with a par value of $0.01 per share at a market price of $10 per share:
Par Value: $0.01 × 1,000,000 = $10,000 → Recorded as "Common Stock" on the balance sheet.
Additional Paid-In Capital: ($10 - $0.01) × 1,000,000 = $9,990,000 → Recorded under APIC.
The shareholders' equity section would look like this:
- Common Stock: $10,000
- Additional Paid-In Capital: $9,990,000
- Total Equity Contribution from Common Stock: $10,000,000
💡 APIC isn’t critical for interviewing but is good to know.
In the room
APIC is where the real money investors paid actually sits, since par value is nominal. It also grows with stock-based compensation, which is the connection worth knowing.