Retained earnings
From Wikipedia, the free encyclopedia
In accounting, retained earnings are net income that have been retained by the corporation at year-end. If the opposite occurs when the corporation has net losses the corporation retains those losses at year-end.
They are reported in the Shareholders' equity section of the corporation balance sheet. A complete presention of the corporation retained earnings or retained losses is presented in the Statement of retained earnings or Statement of retained losses.
The decision of whether a firm should retain net income or paid-out as dividends depends on several factors including, but not limited to the:
- tax treatment of dividends; and
- funds required for reinvestment in the corporation.
