What Is Retained Earning?


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Muddassar Memon answered
Retained earning is a term in accounting. Basically retained earning is the net income which has been retained by the year end by a corporation. If there are loses occurred at the end of the year, the corporation keeps those loses at the year end.

These earnings are reported in the shareholders equity section in the balance sheet released by the corporation. The total presentation of a company's retained earnings or retained losses are given in the Statement of retained earning or Statement of retained losses.

The verdict of whether a company should hold on to net income or give out dividends to the share holders depends on many factors like basic tax treatment of dividends and also the total amount of funds required on reinvestment basis in the company.

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