In
accounting,
retained earnings (sometimes
plowback) refers to the portion of
net income of a
corporation that is retained by the corporation (
plowed back) rather than distributed to
shareholders as
dividends (
paid out). Similarly, if the corporation incurs a loss, then that loss reduces the corporation's retained earnings balance. If the balance of the retained earnings account is negative it may be called
retained losses,
accumulated losses or
accumulated deficit, or similar terminology.