Fixed Capital Accounts
Do not change by the introduction of profits from the partnership income statement .
They remain fixed from year to year, unless there is a deliberate injection of new capital by a partner, or if a partner has the permission of other partners to withdraw capital.
Fixed capital accounts are almost a necessity if the partnership agreement allows the partners to be credited with interest on capital as part of their profit share.
Interest on fixed capital accounts is an appropriation of profits and should be credited to the partners’ current accounts.