What is retained earnings in SAP EC-CS - Consolidation?

SAP Term: retained earnings

• Component: EC-CS

• Component Name: Consolidation

• Description: The accumulated annual net income since the founding of the consolidation unit, adjusted by the distributions of dividends and by appropriations, such as transfers to, or withdrawals from, provisions. Debit values are referred to as net loss. The retained earnings RE of the corporate group is made up of the total RE of the consolidated companies, taking into consideration the standardizing and consolidating entries as well as additional reclassifications based on the corporate policies concerning financial statements. The way RE is stated in the system depends on the order of the items for appropriating RE within the chart of accounts. If the appropriation of RE is stated on the balance sheet, then RE is defined as a totals item encompassing the financial statement item "Annual Profit" as well as all items related to the appropriation of RE. If the appropriation of RE is portrayed as an addendum to the income statement, then RE is a single value item on the balance sheet.

Smart SAP Assistant

• Key Concepts: 
  Retained earnings is a component of the EC-CS Consolidation module in SAP. It is the cumulative net income of a company that has not been distributed to shareholders as dividends. It is also known as accumulated earnings or accumulated profits. 
  
  How to use it: 
  Retained earnings are used to calculate the equity of a company. This calculation is done by subtracting the total liabilities from the total assets of the company. The resulting figure is then used to calculate the retained earnings. The retained earnings can then be used to determine the amount of dividends that can be paid out to shareholders. 
  
  Tips & Tricks: 
  When calculating retained earnings, it is important to take into account any changes in the value of assets and liabilities over time. This will ensure that the calculation is accurate and up-to-date. Additionally, it is important to keep track of any changes in the company’s net income over time, as this will affect the amount of retained earnings. 
  
  Related Information: 
  Retained earnings are closely related to other financial concepts such as net income, total assets, and total liabilities. It is important to understand these concepts in order to accurately calculate retained earnings. Additionally, understanding how retained earnings are used can help companies make informed decisions about their dividend payments and other financial decisions.