Retained Earnings

1. Retained earnings (or deficit) is accumulated earnings (or losses) during the life of the corporation that have not been paid out as dividends. The amount of accumulated retained earnings is reduced by distributions to stockholders and transfers to additional paid-in capital for stock dividends. Retained earnings do not include treasury stock or accumulated other comprehensive income. If the retained earnings account has a negative balance, it is called a deficit. See also common stock and additional paid?in capital and accumulated other comprehensive income. Net income over the life of a corporation less dividends.