how do i tie out my prior year retained earnings
DEFINITION of 'Retained Earnings'. Retained earnings is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business, or to pay debt.It is recorded under shareholders' equity on the balance sheet.The formula calculates retained earnings by adding net income to (or subtracting any net losses from) beginning retained earnings and subtracting any dividends paid to shareholders: Retained Earnings (RE) = Beginning RE + Net Income-Dividends.t is recorded under shareholders' equity on the balance sheet. The formula calculates retained earnings by adding net income to (or subtracting any net losses from) beginning retained earnings and subtracting any dividends paid to shareholders: