Impaired capital

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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 ?
Provision for impairment of capital work-in-progress and intangibles under development (Rs.
Markets whooshed down, countless stop orders were executed, and then markets whooshed right back up, arguably resulting in at least a semi-permanent impairment of capital.
In 1985, the Legislature enacted several medical malpractice reform measures, some of which involved a section of insurance law which provides that no domestic insurer whose primary liability arises from the business of medical malpractice insurance may be subject to an order of rehabilitation or liquidation for reasons relating to insolvency or impairment of capital or minimum surplus to policyholders.
Any consequent impairment of capital and appearance of insolvency might damage the central bank's credibility in preventing inflation.
The GASB says that the guidance includes several disclosure requirements that will help financial statement users understand the nature and impact of impairment of capital assets.
42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, which requires governments to report in their financial statements the effects of capital asset impairment when it occurs.
42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, requiring governments to report the effects of capital asset impairment in financial statements.
The new pronouncement also offers guidance on the appropriate accounting treatment for insurance recoveries, including those not associated with the impairment of capital assets.
Bad loans mounted sharply but the mass of depositors believed that hidden reserves would suffice to offset any possible impairment of capital. The publication of the Credit-Anstalt's balance sheet for the end of 1930 on May 11, 1931 was a shock for which markets and authorities at home and abroad were unprepared: a loss of 140 million schillings, 7.5 percent of the balance sheet and almost five-sixths of the bank's capital and reserves.
42 of the Governmental Accounting Standards Board--Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries
This Statement establishes accounting and financial reporting standards for impairment of capital assets.
The second exposure draft, "Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries," would require governments to report the effects of capital asset impairment in their financial statements when they occur.