Some other scenarios for triggering a capital surplus include when the Government donates a piece of land to the company.
[1] It may also be used to account for any gains the firm may derive from selling treasury stock, although this is less commonly seen.
Many firms authorize shares with some nominal par value, often the smallest unit of currency commonly in use (such as one penny or $0.01), in many jurisdictions due to legal requirements.
The firm may then sell these shares for a much higher price (as the par value is a largely archaic and fictional concept).
According to Companies Act 2006 s.610[2] in the United Kingdom the share premium account may be used only for certain specific purposes.