Capital Surplus

Capital Surplus means equity which cannot classify as capital stock or retained earnings. It is typically created from a stock issued at a premium over par value. Capital surplus is also known as share premium, acquired surplus, donated surplus, paid in surplus or other paid in capital. It is a term that normally appears as a balance sheet item as a component of shareholders equity. Capital surplus is used to account for that amount which a firm raises in excess of the par value of the shares.