Definition of capital surplus

paid-in capital not assigned to common stock. An example is the amount received from stockholders in excess of the par value of shares issued. Capital surplus is an archaic term. Premium on capital stock is preferred.

1. equity -or net worth -not otherwise classifiable as capital stock or retained earnings. Here are five ways of creating surplus:
   1. from stock issued at a premium over par or stated value.
   2. from the proceeds of stock bought back and then sold again.
   3. from a reduction of par or stated value or a reclassification of capital stock.
   4. from donated stock.
   5. from the acquisition of companies that have capital surplus.
2. common umbrella term for more specific classifications such as acquired surplus, additional paid-in capital, donated surplus, and revaluation surplus (arising from appraisals). Most common synonyms: paid-in surplus; surplus.

paid-in surplus, revaluation surplus, and donated surplus. This surplus includes all sources of surplus with the exception of earned surplus.