EXCESS EARNINGS METHOD Definition

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EXCESS EARNINGS METHOD is a specific way of determining a value indication of a business, business ownership interest, or security determined as the sum of a) the value of the assets obtained by capitalizing excess earnings and b) the value of the selected asset base. Also frequently used to value intangible assets.

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CONTRIBUTED SURPLUS is money a company receives by selling shares above par value or their stated value, or from government donation of land to the company, etc. Contributed Surplus is a balance sheet item that is part of the shareholders' equity.

OPERATION AGREEMENT, within an LLC, is similar to the constitution of a corporation. It is drafted primarily because an LLC only has a basic Articles of Organization that is very general in nature. An Operation Agreement has much more specificity as to the formation and operation of the LLC organization.

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