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    Brianricha's Avatar
    Brianricha Posts: 1, Reputation: 1
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    #1

    Jul 21, 2008, 05:26 PM
    Why is it important to keep paid-in capital separate?
    Why is it important to keep paid-in capital separate from earned capital?
    segcor's Avatar
    segcor Posts: 7, Reputation: 1
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    #2

    Jul 23, 2008, 08:34 PM
    It is important to keep paid-in capital separate from earned capital because they are two different sources of funds. The first is from investors and the second is from earnings. That way, users understand the cummulative financial position from those two sources and can evaluate the position as a going concern.
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