donated surplus

Definition

Account found on corporate balance sheets under shareholder's equity detailing assets or equity that is given freely to a corporation from an investor in exchange for nothing. Two popular reasons for why an investor may do this are: in order to help a firm obtain more assets to be used for growth that would help a firm generate better future returns and/or for tax benefits. It should be noted that this is different from contributed surplus and contributed capital, which is capital that a corporation owns in excess of par. also called donated capital.

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