The statement of retained earnings shows how beginning retained earnings changed during the period into the ending retained earnings balance.
The statement of retained earnings is a financial statement that shows how the retained earnings balance changed during a reporting period.
It starts with beginning retained earnings and then incorporates the main items that increase or decrease that balance before arriving at ending retained earnings.
beginning retained earnings
net income or net loss
dividends
prior-period or policy-related adjustments when applicable
ending retained earnings
This statement helps readers connect profitability to the amount of earnings actually kept in the business.
It is the reporting bridge between the income statement, dividend decisions, and the shareholder equity section of the balance sheet.