Previously under UK GAAP, we included the ability to show Dividend Paid and/or Reserves brought forward as part of the Profit and Loss. Retained earnings are often reinvested in the company to use for research and development, replace equipment, or pay off debt. They can be invested in more fixed assets, extra stocks and so on. Retained losses can result in negative shareholders' equity. Retained earnings can be a negative number if the company has had a loss or a series of losses that amount to more than its recent profit or series of profits. They can be left in the business as cash in the bank. The retained earnings formula is a calculation that derives the balance in the retained earnings account as of the end of a reporting period.Retained earnings is that portion of the profits of a business that have not been distributed to shareholders; instead, it is retained for investments in working capital and/or fixed assets, as well as to pay down any liabilities outstanding. At the end of that period, the net income (or net loss) at that point is transferred from the Profit and Loss Account to the retained earnings account. It highlights some of the common issues that arise in practice. In this situation, the figure can be referred to as an accumulated deficit or retained or accumulated losses. It does not seek to provide a comprehensive commentary on the subject but instead is intended as an introduction for those less familiar with the subject. The retained earnings of a corporation is the accumulated net income of the corporation that is retained by the corporation at a particular point of time, such as at the end of the reporting period. Retained Earnings are defined as the cumulative earnings earned by the company till the date after adjusting for the distribution of the dividend or the other distributions to the investors of the company and it is shown as the part of owner’s equity in … Rather, these earnings are retained in the company. Although under FRS this is not a requirement as the information is shown elsewhere, this will be within the Statement of Income and Retained Earnings. It is up to the business owners to … - Retained profits are also under the control of the business. Key regulations for this … UK Distributable Profits . - Retained profits are also very flexible. Retained earnings represent the portion of net income or net profit on a company's income statement that are not paid out as dividends. When you run the Year End option in Sage Accounts, the current year balances on profit and loss nominal codes transfer to the retained earnings control account, by default 3200. This factsheet provides a summary of the law and related guidance on payment of dividends by UK companies.