How to Calculate and Account for Stock Issuances

By Motley Fool Staff – Updated Apr 30, 2025 at 3:20 PM

Key Points

Issuing stock boosts a company's cash but requires precise accounting for the shares.
To determine stock issuance proceeds, multiply shares by price and subtract underwriter fees.
Stock issuance impacts cash, common stock, and paid-in capital accounts on the balance sheet.

When companies need to raise money, they often do so by selling additional shares of stock. These stock issuances have consequences not just to the amount of cash the company has on hand but also on the company's accounting statements. Below, we'll look at how you calculate the results of a stock issuance and what you need to do to account for it correctly.

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An up-close view of a paper stock certificate. — Image Source: Getty Images.

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Stock issuances are important ways for companies to get the capital they need. By knowing how to calculate and account for them properly, you'll learn to recognize them when you see them in a company's financial statements.

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