Additional Paid-in Capital is an accounting term that refers to money paid by investors in excess of the par value of securities. This type of capital is seen on a company’s balance sheet, usually as part of its liabilities section. Companies use this capital to grow and expand their operations, finance new projects, or pay off existing debt. When investors purchase shares at a premium, they are essentially providing Additional Paid-in Capital – and become partial owners of the company, entitled to dividend payments and potential profits. So although it may be classified as a liability on paper, it is actually an asset in terms of financial growth and stability.