Additional Paid-in Capital (APIC) is the amount of money paid to acquire stock that exceeds the stock’s par value per share. Par value per share is set by the corporation in the corporate charter, which is also referred to as the corporation’s Articles of Incorporation.

For example, John pays $10,000 to Company XYZ Inc. for 1,000 shares of common stock ($10 per share). The common stock issued by Company XYZ Inc. has a par value of $1 per share. John’s acquisition of stock is as follows:

  • Common Stock Par Value of $1,000 (1,000 shares times $1)
  • Additional Paid-in Capital of $9,000 ($10,000 – $1,000)

On a per-share basis, the calculation is as follows:

  • Par Value ($1 per share time 1,000 = $1,000)
  • APIC Value ($10 – $1 = $9 per share for APIC).

On a corporation balance sheet, the company generally reports these values on separate line items. The equity section typically consists of individual line items for common stock at par value, preferred stock at par value, additional paid-in capital, retained earnings, adjustments to shareholders’ equity, and reductions to equity for treasury stock.