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Statement of Retained Earnings: Definition and Meaning
Definition
A statement of retained earnings is a financial statement or supporting schedule showing changes in retained earnings during a reporting period.
Why It Matters
It connects beginning retained earnings, net income or loss, dividends or owner distributions where applicable, prior-period adjustments, and ending retained earnings. This helps users understand how cumulative profits have changed over time.
The presentation depends on the entity type and applicable accounting framework. Some companies present this information within a broader statement of changes in equity.
Example
A company reports beginning retained earnings, current-year net income, dividends paid, and ending retained earnings.
Related Terms
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