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Method | Summary |
Retained earnings
| Record the excess entirely in retained earnings
|
Retained earnings / additional paid-in capital
| Allocate the excess between retained earnings and additional paid-in capital; the balance recorded in APIC is limited as discussed below
|
Excerpt from ASC 505-30-30-8
If a portion of the excess is allocated to additional paid-in capital, it shall be limited to the sum of both of the following:
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