What are retained earnings in a company?
British Columbia, Canada
The following excerpt is from Younger v. Younger, 2017 BCSC 363 (CanLII):
Retained earnings, by definition, represent accumulated net income left in a company that is not distributed by way of dividend to shareholders. However, retained earnings do not necessarily equate to cash on hand. Rather, retained earnings are often re-invested into the company for the purpose of replenishing or replacing necessary capital assets or meeting required operational needs. Retained earnings are thus treated as equity in the company rather than cash: see Chutter v. Chutter, 2008 BCCA 507 at para. 114.
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