Construction of Abuja began in the early 1980s, with the city officially inaugurated as Nigeria’s capital on December 12, 1991. Government ministries, embassies, and multinational corporations gradually moved their offices to Abuja, turning it into a bustling hub of political and economic activity. Over the years, the city has evolved, featuring iconic landmarks such as Aso Rock, the Abuja National Mosque, the Nigerian National Christian Centre, and the Millennium Park. The capital city is emerging as a tech hub, with startups finding fertile ground for growth.

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  • Now, that’s quite a steep increase in the price of shares of a company that just went public, but if investors think they can profit from it, they won’t hesitate.
  • Minister of the Federal Capital Territory, Barrister Ezenwo Nyesom Wike has expressed a resolute belief in Nigeria’s potential for redemption, despite its numerous socio-political and economic challenges.
  • This has given the company the ability to operate with greater financial stability and to take advantage of new opportunities without the pressure of significant debt obligations.

Employee productivity is a crucial factor that determines the success and growth of any business,… In the realm of personal development and productivity, the concept of weaving strategic planning… Convertible notes are a type of debt instrument that allows investors to invest in early-stage…

In other words, capital surplus is the excess amount that investors have paid for the shares above the stated par value. From an accounting perspective, capital surplus is recorded on the balance sheet under shareholders’ equity. It’s important to note that while capital surplus can affect the total equity of a company, it does not directly impact retained earnings or the company’s ability to pay dividends.

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It can also be called share premium, additional paid-in capital, or contributed surplus. A capital surplus can enable you to invest in new projects, equipment, technology, or acquisitions that can increase your revenue and market share. A capital surplus can also allow you to enter new markets, diversify your products or services, or launch new marketing campaigns that can boost your brand awareness and customer loyalty. Your capital surplus is an important tool for planning and decision making for your business.

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  • They are funds that have a purpose when they are taken from the capital profits.
  • Capital surplus is the amount of money that a company has left over after paying for its operating expenses, taxes, and debt obligations.
  • This amount is generated as a result of excess funds that the company procured by selling the shares over the par value.
  • In general, the amount received as capital surplus is not subjected to corporate income taxes.
  • The Nigeria Capital is Abuja, located in the Federal Capital Territory (FCT) in the center of the country.

To understand capital surplus on the balance sheet, you must first grasp the concept of surplus. A surplus is a difference between the total par value of a company’s issued shares of stock, and its shareholders’ equity and proprietorship reserves. So, the company XYZ Corps earns a surplus of $1,40,000 for the sale of 10,000 shares on a balance sheet. This amount is generated as a result of excess funds that the company procured by selling the shares over the par value. The company can use this fund to finance the growth of the company, but it cannot be used as payments paid to shareholders. In essence, shareholders don’t get a penny of the excess amount and all of it belongs to the company.

Revaluation of assets is the process of adjusting the book value of an asset to reflect its current market value. This can have a significant impact on the capital surplus of a company, which is the amount of equity that exceeds the par value of its shares. Capital surplus can be used for various purposes, such as paying dividends, repurchasing shares, or investing in new projects. In this section, we will explore how revaluation of assets affects the capital surplus from different perspectives, capital surplus such as accounting, taxation, and valuation. We will also provide some examples of companies that have revalued their assets and how it impacted their capital surplus. Understanding the origins and implications of capital surplus is crucial for investors, as it provides insights into a company’s financial strategies and potential for future growth.

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Capital surplus is an important component of shareholders’ equity, as it represents the additional funds that the company has raised from investors beyond the par value of the shares. These funds can be used for various purposes, such as financing growth, paying off debt, or investing in new projects. Capital surplus is a non-distributable reserve, meaning it cannot be directly paid out as dividends to shareholders. Instead, it must be retained within the company or used for other lawful purposes, such as share buybacks or capital investments. Capital surplus, also known as “additional paid-in capital” or “share premium,” is an account in a company’s shareholders’ equity section on the balance sheet. It represents the amount of money raised by issuing shares above their par value or face value, which is a nominal value assigned to the shares during the company’s incorporation.

Capital surplus arises from the issuance of shares at a price above par value, whereas retained earnings are profits that a company has earned and retained over time after dividends are paid out. While capital surplus is a valuable financial asset for companies, it comes with a host of legal considerations that require diligent attention and expertise. Companies must navigate these legalities to leverage their capital surplus effectively and maintain robust financial health. While both Capital Surplus and Paid-in Capital are reflections of a company’s equity, they tell different stories about the company’s financial journey and investor confidence. Understanding the nuances between them is essential for investors, analysts, and the company’s management as they make strategic decisions and assess the company’s financial health.

This growth can be connected to the city’s status as Nigeria’s capital city and its reputation for being welcoming to all groups, no matter their ethnicity or religion. This population puts Abuja currently as the 4th biggest metropolitan population in Nigeria after Lagos, Kano, and Ibadan. However, the city experienced a rapid population increase of almost 140% in the early 2000s. According to World Population Review, the estimated population of Abuja (Federal Capital Territory, including the city and surrounding metro area) is about 4.21 million as of 2025. This reflects rapid growth from around 3.07 million in 2022, showing Abuja as one of Nigeria’s fastest-growing urban regions.

The rainy season typically lasts from April to October, bringing abundant rainfall to the region. During this period, the Nigeria capital experiences lush vegetation growth and cooler temperatures. The dry season, from November to March, is marked by warmer temperatures and occasional dusty Harmattan winds from the Sahara. The relocation of Nigeria’s capital from Lagos to Abuja was a strategic decision driven by several key factors.

Additional Paid-In Capital, often referred to as share premium or capital surplus, represents the amount received from shareholders in excess of the par value of the shares issued. It is an essential component of paid-in capital and indicates the premium investors are willing to pay over the nominal value of the stock. No, capital surplus is considered a non-distributable reserve and cannot be used to pay dividends; instead, it represents additional paid-in capital that supports the company’s financial stability and growth initiatives. A company that is profitable and generates a lot of cash can afford to pay higher dividends to its shareholders.

The following briefly describes a few examples of the reserves you might come across and will give you a sense of their purpose on the balance sheet. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products. The accounting treatment of APIC involves several steps and considerations, ensuring accurate representation in financial statements.

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This can signal the company’s confidence and commitment to its shareholders and create a loyal and stable investor base. However, a company that has a short or erratic history of paying dividends or cutting them frequently may want to be more cautious and flexible with its dividend payments. This can avoid disappointing or upsetting its shareholders and allow the company to adjust its dividend policy according to its changing circumstances. Managing your capital surplus effectively is crucial for the financial health and growth of your business. A capital surplus refers to the excess funds that a company has after meeting its financial obligations and investment needs. It represents a positive financial position and provides opportunities for strategic decision-making.

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In the realm of corporate finance, a particularly intriguing aspect is the accumulation of funds that companies report as equity, but not directly from earnings or share issuance. This pool of funds, often referred to as additional paid-in capital or share premium, represents amounts paid by investors above the par value of shares. It’s a testament to the confidence investors place in a company’s potential beyond the nominal value of its stock.