Paid-up Capital

Code: 3110
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Account Information

Financial Statement Statement of Financial Position
Normal Balance Credit

Definition

Represents the portion of capital that has been actually paid by owners. This account appears on the balance sheet under equity.

📐 IFRS vs US GAAP Accounting Treatment

IFRS IAS 1 Presentation of Financial Statements
US GAAP ASC 505 Equity

❓ Frequently Asked Questions

Q: What is Paid-up Capital?

A: Paid-up capital is the actual amount paid by shareholders or owners to the company for issued shares. This account represents part of shareholders' equity on the balance sheet and reflects the owners' investment in the company.

Q: What is the difference between Paid-up Capital and Authorized Capital?

A: Authorized Capital is the maximum number of shares that the company's articles of association permit it to issue. Paid-up Capital is the portion actually issued and paid for by shareholders.

Q: How is a capital increase recorded?

A: When capital is increased, the entry is: Dr. Bank Account (for the cash increase), Cr. Paid-up Capital (for the increase amount). If issued at a premium, the Share Premium account is added on the credit side.

Q: Can Paid-up Capital be reduced?

A: Yes, Paid-up Capital can be reduced by an extraordinary general assembly resolution for reasons such as: covering accumulated losses, returning excess capital to shareholders, or canceling treasury shares. Laws and regulations governing capital reduction must be followed.

Q: How is Paid-up Capital presented in the Statement of Changes in Equity?

A: Paid-up Capital is presented as a separate line item in the Statement of Changes in Equity, showing the beginning balance, increases (new issuances), decreases, the effect of any other changes, and the ending balance.