Previous year retained profit on a P/L statement

How to reflect retained profit / loss from previous years on a P/L statement?

Didn't find your answer?

Hello,

As far as I understand, a balance sheet statement includes accumulated profit/loss from all previous years (less dividends paid). So how to reftect retained profit from the previous years on a current P/L statement? Would the following be OK?

... 
Net Profit/Loss for the current financial year .........  £ 1000
Dividends Payable ......... £ 200
Retained profit/loss from the previous year ......... £ 500 
Total Retained Profit / Loss ........ £ 1300 (this will go to the balance sheet - "Profit & Loss Accounts")

Thank you.

Replies (7)

Please login or register to join the discussion.

Routemaster image
By tom123
16th Jan 2017 13:19

In what context are you talking about?

Accounts for a sole trader?

Statutory accounts for a limited company?

Other?

This will have a bearing on the answer.

Thanks (0)
By johngroganjga
16th Jan 2017 13:20

Yes on those figures the retained profit in the balance sheet at the end of the year will indeed be £1,300.

You are not an accountant I take it.

Thanks (0)
Euan's picture
By Euan MacLennan
16th Jan 2017 13:31

@Tom
Sole trader? Not if he is paying dividends!

Yes, but:
1. It is preferable to show the movements on Retained Profit in a separate note to the accounts.
2. If you must show them at the bottom of the P&L, the balance brought forward from the previous year should come before the deduction for dividends because dividends are paid out of the retained profits to date, not just out of the current year's profit.

Thanks (1)
Replying to Euan MacLennan:
Routemaster image
By tom123
16th Jan 2017 14:23

Of course -

That'll teach me to reply whilst on tea breaks at work.

Thanks (0)
Replying to Euan MacLennan:
avatar
By keithalexis
16th Jan 2017 15:23

Thanks Euan.

Thanks (0)
RLI
By lionofludesch
16th Jan 2017 14:55

Another DIY accountant.

How have you dealt with the Corporation Tax ?

Thanks (0)
By cheekychappy
16th Jan 2017 15:08

OP never bother responds - see their previous questions.

We need to have markers at the side of usernames for bellends like this.

Thanks (0)