capital surplus

Examples of capital surplus in the following topics:

• The Capital Account

  • The capital account acts as a sort of miscellaneous account, measuring non-produced and non-financial assets, as well as capital transfers.
  • There are two common definitions of the capital account in economics.
  • Instead, the capital account acts as a sort of miscellaneous account, measuring non-produced and non-financial assets, as well as capital transfers.
  • Likewise, a surplus in the capital account means that a money is flowing into a country and the country is selling (or otherwise disposing of) non-produced, non-financial assets.
  • The capital account can be split into two categories: non-produced and non-financial assets, and capital transfers.

• Calculating Expected Value

  • Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital.
  • If current assets are less than current liabilities, an entity has a working capital deficiency, also called a "working capital deficit. "
  • We can find working capital by:
  • The common commercial definition of working capital for the purpose of a working capital adjustment in a mergers and acquisitions transaction (i.e., for a working capital adjustment mechanism in a sale and purchase agreement) is equal to:
  • Current Assets - Current liabilities (excluding deferred tax assets/liabilities, excess cash, surplus assets, and/or deposit balances).

• The Financial Account

  • The financial account (also known as the capital account under some balance of payments systems) measures the net change in ownership of national assets.
  • When financial account has a positive balance, we say that there is a financial account surplus.
  • Other investment includes capital flows into bank accounts or provided as loans.
  • Inbound capital flows (from sales of the account's foreign currency), especially when combined with a current account surplus, can cause a rise in value (appreciation) of a nation's currency, while outbound flows can cause a fall in value (depreciation).
  • This contributes to a financial account surplus.

• Financing Balance-of-Payments Deficits and Surpluses

  • On the other hand, a balance-of-payment surplus does the exact opposite.
  • If a country experiences a balance-of-payment surplus, then it allows its currency to appreciate.
  • Consequently, the financial account falls until the balance-of-payments surplus approaches zero.
  • Causes of capital flight vary.
  • Once the capital outflow becomes severe, then government may impose capital controls on the banks to limit outflows.

• Relationships Between Statements

  • The statement of shareholder's equity reconciles changes in the equity accounts (contributed capital, other capital, treasury stock) from the beginning to the ending balance sheet.
  • A clean surplus occurs when all changes in the balance sheet are reconciled by the income statement.
  • US GAAP doesn't have a clean surplus because some items that affect balance sheet accounts don't come through the income statement.
  • Instead, there is said to be a dirty surplus.

• Impact of Changing Price on Producer Surplus

  • Producer surplus is affected by many different factors.
  • Lower prices result in lower potential producer surplus and goods supplied: with a lower equilibrium price, the producer surplus triangle will be smaller.
  • Decreases in the supply curve will cause decreases in producer surplus.
  • Increases in the supply curve will cause increases in producer surplus.
  • Producer surplus is zero because the price is not flexible.

• The Demand Curve and Consumer Surplus

  • Consumer surplus is the difference between the maximum price a consumer is willing to pay and the actual price they do pay.
  • Consumer surplus plus producer surplus equals the total economic surplus in the market.
  • Generally, the lower the price, the greater the consumer surplus.
  • Another way to define consumer surplus in less quantitative terms is as a measure of a consumer's well-being.
  • An individual's customer surplus for a product is based on the individual's utility of that product.

• Impacts of Productivity on Output

  • The contribution of growing capital intensity of IT to growth in labor productivity has been generally rising over time.
  • Indeed, during the latter part of the 1990s, it accounted for the bulk of the contribution of rising capital intensity and has clearly played a major role in the growth of Australia's labor productivity.
  • This criterion is the ability to produce surplus value.
  • Surplus value indicates that the output has more value than the sacrifice made for it; in other words, the output value is higher than the value (production costs) of the used inputs.
  • If the surplus value is positive, the owner's profit expectation has been surpassed.

• Defining Producer Surplus

  • Producer surplus is the difference between the amount producers get for selling a good and the amount they want to accept for that good.
  • To find the resulting total producer surplus, all of the rectangles for the individual price levels are added together, and the total area is the total producer surplus.
  • In the figure, producer surplus at different prices is represented by the pink rectangles.
  • Producer surplus is the shaded area directly above the supply curve, up to the equilibrium point.
  • Consumer surplus is the shaded area directly under the demand curve, up to the equilibrium point.

• Gains from Markets

  • Gains in a market are referred to as total welfare or economic surplus.
  • Gains within a market are referred to as total welfare or economic surplus.
  • Within total welfare, economists look at consumer surplus and producer surplus .
  • The producer surplus is $10.
  • The total welfare (or economic surplus) is the sum of the consumer surplus and the producer surplus.