Impaired capital

Impaired capital

When a company's total capital is less than the par value of all its capital stock.

Impaired Capital

A situation in which the total value of the capital in a publicly-traded company is less than the par value of its capital stock. Companies with impaired capital have usually taken out too many loans or have made a series of poor investments. Impaired capital may force a company to issue more stocks (for example, in a down round) or to liquidate.
References in periodicals archive ?
Sungdong Shipbuilding and Marine Engineering is likely to go through liquidation as it is in a state of impaired capital and has no cash holdings.
The still weak asset quality and the impaired capital base are constraining factors.
Additionally, credit union-to-credit union transactions often occur when the to-be-acquired credit union is troubled and has an impaired capital position.
The Financial Strength rating is unchanged at B- in view of the Bank's poor asset quality and severely impaired capital.
Prior to the amendment, there were cases in which asset management companies with impaired capital were given a high rating on capital adequacy because capital impairment was not a criterion used in assessing capital adequacy.
Some insurance companies withdrew from the market because of their inability to compete successfully, impaired capital positions or because of a decrease in the availability of reinsurance.
For impaired capital assets that will continue to be used by the government, the amount of impairment--the portion of historical cost that should be written off--should be measured by the method described below that most appropriately reflects the decline in service utility of the capital asset.
Furthermore, for permanently impaired capital assets, the appropriate accounting and financial reporting depends on whether the asset is expected to remain in service.
Bank of Japan (BOJ) Governor Masaru Hayami said Wednesday an additional injection of public funds into banks may become necessary if they fail to improve their impaired capital bases through self-support efforts.
Japan has funneled more than 10 trillion yen in public funds into banks' impaired capital accounts since March 1998 to keep their depleted capital bases from crimping their ability to provide credits to businesses.
Bad loans have caused a deficit, which in turn, has impaired capital.
The credit crunch experienced in New England over the past two years is an example of a severe regional economic shock that was magnified by the impaired capital position of most New England depository institutions.