Accumulated earnings and profits, Corporate Finance

This is an accounting term which is applicable to stockholders of closely going businesses. Accumulated earnings and profits are a company's net profits after subtracting distributions to the stockholders. This is computed as of the commencement of the year.

Accumulated earnings and profits are equivalent to retained earnings, as both terms refer to the net profits of a company after shareholder disseminations. However, accumulated earnings and profits also can involve reserve accounts, which are not deductible and which can be involved when calculating taxable earnings.

Posted Date: 7/27/2012 8:02:40 AM | Location : United States

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