Dual Reporting for Equity and Other Comprehensive Income under IFRS and U.S. GAAP

5 ADDITIONAL PAID-IN CAPITAL

5.1 TERMINOLOGY

The term additional paid-in capital under U.S. GAAP corresponds to share premium under IFRSs. An aged U.S. terminology for additional paid-in capital is capital surplus or paid-in surplus,¹ expressions already criticized by ATB 1, which supported its discontinuance because the notion of redundancy was generally considered not appropriate with reference to capital or used with different meanings in economics or legal contexts.²

Comment: Several U.S. pronouncements use the term paid-in capital as a synonym for additional paid-in capital,³ although in general this is also a substitute for contributed capital.

The AICPA Accounting Trends & Techniques shows that approximately 63% and 61% of the survey companies that in 2009 and 2005, respectively, presented an additional paid-in capital account used the term additional paid-in capital on the face of the balance sheet, 11% and 10% the term paid-in capital, 3% capital surplus, approximately 17% and 20% the expression capital in excess of par or stated value, and the other companies used other terms. No one used paid-in surplus.⁴

5.2 ADDITIONAL PAID-IN CAPITAL VERSUS OTHER PAID-IN CAPITAL ACCOUNTS

In an issuance of stock (common or preferred), additional paid-in capital results from the difference between the proceeds for contributed capital and the par value of shares. Section 4.1 previously mentions certain transactions and events that affect additional paid-in capital as well as disclosures ...