In accounting, the statement of retained earnings is a type of financial statement that reports the changes in retained earnings for a specific period of time. The change is the net income minus the dividends.
Essentially reports what you kept.
Elements
The statement has the following elements:
- Net earnings — are added. It’s the same value as the income statement.
- Dividends — are subtracted.
- Retained earnings, in other words, are the net earnings minus the dividends.