What\u2019s this \u2018retained earnings\u2019 we hear often talked about? It\u2019s retained, that is it\u2019s kept unused for a period of time, that\u2019s for one, but what does it comprise of? What is being retained?\u00a0<\/p>\n
Your company\u2019s earnings essentially are what you\u2019ve left as a profit (or a loss) into your company, i.e. you haven\u2019t taken them out in the form of dividends (and cash as the opposite of the accounting entry you\u2019d make). Retained earnings are accumulated over time starting from the date you commenced with your business, i.e. from the date you made your first entry onto your income statement. As it is, a retained earnings is not just accumulated profits, but also accumulated losses your business has made over a period of time.<\/p>\n
Retained earnings live a life of their own in the sense that reporting period\u2019s results are just added to the amount after each period and the only other changes that would occur are dividend payments. Yes, there are other types of entries that could occur to the retained earnings, however they\u2019re connected to not so regular situations, i.e. options, restructurings etc.<\/p>\n
As it is, keeping a line item called Retained earnings within your equity normally means just having one entry happening into it once a year.<\/p>\n","protected":false},"excerpt":{"rendered":"
What\u2019s this \u2018retained earnings\u2019 we hear often talked about? It\u2019s retained, that is it\u2019s kept unused for a period of time, that\u2019s for one, but what does it comprise of? What is being retained?\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-8740","post","type-post","status-publish","format-standard","hentry","category-4-6-statement-of-changes-in-equity"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/8740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=8740"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/8740\/revisions"}],"predecessor-version":[{"id":8741,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/8740\/revisions\/8741"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=8740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=8740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=8740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}