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Prior Retained Earnings on Balance Sheet?

I'm in the process of setting up a new computer system for a customer. They list all the prior retained earnings, year by year, on their balance sheet, all the way back from 1993. The owner likes to see this on the current balance sheet so he doesn't have to pull out the prior reports to compare. Is this common? Where is the other half of these entry? Our system calculates the current retained earnings during the printing of an Income Statement. It posts the the difference between the current income and the current expenses to Current Retained Earnings. There is no debit/credit entry per se.

Reply to
Meyer1228
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What the prior accountant did was to create new RE accounts, named "RE 1993" or something like that. Many accounting programs will automatically take the Current Retained Earnings balance as of the end of the year and post it to the default retained earnings account. It's then a simple matter to write a JE to transfer the balance in the default RE account to a year-numbered one.

Reply to
Thomas Healy

"Meyer1228" wrote

What it sounds like is he's tracking each years profit or loss. Retained Earnings is a cumulative total of annual profits and losses.

No, it's not.

Something is missing here, as there generally are not any entries made to R/E. It is the sum of the revenues less expenses, year after year.

That'd be current year profits or loss. Retained Earnings is a balance sheet item.

Just a bad title to an account. Generally it gets transfered to a balance sheet line called "Current Year (period) Profits/Losses"

Nor should there be.

Reply to
Paul A Thomas

As a practical matter, those type of details are not seen on "public" financials, those for the public, lenders, etc.

Generally, if that type of detail is needed, they would be shown on financials that are restricted to management use only.

Reply to
Paul A Thomas

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