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contributed surplus

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Financial Dictionary

Contributed Surplus

The amount of money a company earns from sources other than its main business operation.

Investopedia Commentary

The contributed surplus figure helps both investors and the company itself to distinguish between non-operational and operational income and is found within shareholders' equity on their balance sheet. If this value was combined with operational earnings, investors would have a hard time forecasting relatively accurate future earnings, since earnings from contributed surplus are not a part of ongoing business operations.

When a stock is sold above par value by the company in a primary offering, the additional amount would be added to their contributed surplus account.

Related Links

Reading The Balance Sheet

See also: Balance Sheet, Earnings, Operating Earnings, Operating Expense, Par Value, Shareholders' Equity, Stock

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