accumulated earnings of a corporation since inception less dividends. Retained earnings is also net of prior period adjustment and transfers to paid-in capital accounts. Retained earnings is shown as a separate category within the stockholders' equity section of the balance sheet. It typically has a credit balance; a deficit is unusual. Retained earnings is broken down into the following two types: unappropriated retained earnings and appropriated retained earnings.
undistributed earnings that have not been paid to stockholders or transferred to a surplus account. Retained earnings are part of a bank's net worth, or capital and surplus. In a bank, there is little, if any, distinction between capital and surplus, because all amounts contributed by common stockholders over the nominal value of their equity goes into the surplus account.
net profits kept to accumulate in a business after dividends are paid; also called undistributed profits or earned surplus. Retained earnings are distinguished from contributed capital.Compare with earnings and profits; paid-in capital.
net profits kept to accumulate in a business after dividends are paid. Also called undistributed profits or earned surplus.Retained earnings are distinguished from contributed capital-capital received in exchange for stock, which is reflected in capital stock or capital surplus and donated stock or donated surplus. stock dividends-the distribution of additional shares of capital stock with no cash payment-reduce retained earnings and increase capital stock. Retained earnings plus the total of all the capital accounts represent the networth of a firm.
net profit of a business, less dividends. Reinvestment of retained earnings enables an insurance company to write more business from a stronger capital base. Contributions to retained earnings come from three sources: (1) excess interest from investment earnings; (2) loss savings (fewer and/or smaller losses than were loaded into premiums); and (3) expense savings (less expense costs than were loaded into premiums).
