In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends. Similarly, if the corporation takes a loss, then that loss is retained and called variously retained losses, accumulated losses or accumulated deficit. Retained earnings and losses are cumulative from year to year with losses offsetting earnings.
Retained earnings are reported in the shareholders' equity section of the balance sheet. Companies with net accumulated losses may refer to negative shareholders' equity as a shareholders' deficit. A complete report of the retained earnings or retained losses is presented in the Statement of Retained Earnings or Statement of Retained Losses.
Read more about Retained Earnings: Stockholders' Equity, Dividends
Famous quotes containing the words retained and/or earnings:
“He degraded himself by the vice of drinking, which, together with a great stock of Greek and Latin, he brought away with him from Oxford and retained and practised ever afterwards.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)
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—Edward Dahlberg (1900–1977)