Authorised share capital — Accounting glossary

Authorised capital is a legal ceiling on the nominal amount of shares a company may issue where its governing law or constitution uses that concept. It is not cash already raised and is not the same as issued share capital. The requirement is jurisdiction dependent; many modern company regimes do not require an authorised capital limit.

Worked example

A constitution may permit 1,000,000 shares of $1 nominal value while only 400,000 have actually been issued.

Common mistake

Nominal value describes the face value of a share. It should not be confused with a share’s market price or issue price.

Where it appears in your exams

Qualification	Exam	Relationship	Period
ACCA	FA	Historical	September 2026–June 2027
ACCA	K1	Historical	July 2027–August 2028
FIA	FFA	Historical	September 2026–June 2027

Related terms

Called-up capital
Share capital
Share premium account

Also called: Authorised capital, Nominal capital, Authorised (or nominal) capital