The Statement of Retained Earnings (and similarly the Equity Statement, Statement of Owner's Equity for a single proprietorship, Statement of Partner's Equity for partnership, and Statement of Retained Earnings and Stockholders' Equity for corporation) are basic financial statements.
The statements explain the changes in a company's retained earnings over the reporting period. They break down changes in the owners' interest in the organization, and in the application of retained profit or surplus from one accounting period to the next. Line items typically include profits or losses from operations, dividends paid, issue or redemption of stock, and any other items charged or credited to retained earnings.
The statements are expected by Generally Accepted Accounting Principles and explain the owners' equity and retained earnings shown on the balance sheet, where:
Owners' Equity = Assets − Liabilities
Read more about Statement Of Retained Earnings: Requirements of The U.S. GAAP, Requirements of IFRS
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