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Why retain earnings rises more than net income?

Why do companies show an increase in their retained earning that is larger than their net income?

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Hi,

On the annual accounts of many large companies there will be a change in their retained earnings for the year that is completely disproportionate to their net income or loss for that year. Why is this?

For example, with Barclays most recent annual accounts for the year ended 2018, they show a net profit of 2.372 billion, but their retained earnings rose by 16 billion (from 27.5b to 43.4b). How can this be? 

Note it is not just with Barclays or banks but with many large companies whose financial statements I inspect.

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By Metis
14th Jun 2019 04:50

for a plc it most likely relates to stock dividends issued

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By johngroganjga
14th Jun 2019 06:04

If you are looking at the accounts of large companies filing full accounts, as you must be even to know what their profits or loses are, the accounts will include a note explaining the change in reserves.

You can’t have been looking properly.

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By WhichTyler
14th Jun 2019 08:36

Did it reconcile in the SoCE?

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By Rymd
14th Jun 2019 08:58

Thanks for the replys everyone. After taking another look at the accounts I can see that the reason is outline in the SoCE.

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