Contributed Capital
The total amount invested by shareholders in exchange for stock, including both par value and additional paid-in capital, representing externally sourced equity.
Contributed Capital
The total amount of cash and other assets contributed to a corporation by its shareholders in exchange for stock, including both par value and additional paid-in capital.
For example, if a company issues 100,000 shares with $1 par value at $15 per share, the contributed capital would be $1.5 million, comprising $100,000 in common stock and $1.4 million in additional paid-in capital.
Contributed capital represents external equity financing through share issuance rather than internally generated profits. It appears in the shareholders’ equity section of the balance sheet, providing information about funds invested by shareholders distinct from accumulated earnings. This distinction helps users understand the sources of a company’s equity financing.