Retained Earnings in the Balance Sheet

Where to Find Retained Earnings in the Balance Sheet

In Clear Books Tax, the Retained Earnings figure in the balance sheet is calculated automatically — you do not enter it directly.

How It Works

Clear Books Tax calculates Retained Earnings as:

> Net Assets (Total Assets minus Total Liabilities) minus Share Capital

The field appears in the Capital and Reserves (Equity) section of the balance sheet and updates automatically as you enter your other figures.

What You Need to Enter

To get the correct Retained Earnings figure, make sure you have entered:

1. Fixed Assets — property, equipment, vehicles (if any)
2. Debtors — money owed to your company
3. Cash — bank balances and cash in hand
4. Creditors (due within 1 year) — short-term debts and amounts owed
5. Creditors (due after 1 year) — long-term loans (if any)
6. Share Capital — the value of shares issued (often £1 or £100 for small companies)

Once all of these are entered, Clear Books Tax calculates the Retained Earnings (and Shareholders' Funds total) automatically.

Members' Equity and Members' Funds

If your company is a Limited Liability Partnership (LLP), the balance sheet uses "Members' Funds" instead of "Shareholders' Funds". The Retained Earnings line works the same way — it is still calculated automatically.

The term "Members' Equity" refers to the same concept and is shown as the combination of Share Capital and Retained Earnings in your accounts.

The Balance Sheet Must Balance

For Retained Earnings to show the correct figure, your balance sheet must balance — that is, Total Assets must equal Total Liabilities plus Equity. If your figures are correct but something looks off, double-check:

• All assets and liabilities are entered in the correct sign (positive for assets, negative/positive for liabilities depending on the field)
• Share capital matches what was actually issued to shareholders

Common Questions

Can I override the Retained Earnings figure?

No — the field is locked because Clear Books Tax calculates it from your other entries to ensure the balance sheet is consistent and accurate.

My Retained Earnings figure looks wrong

Check that all your balance sheet figures are entered correctly. If your accounts show a specific retained earnings figure, work backwards: Total Assets minus Total Liabilities should equal Share Capital plus Retained Earnings. Adjust your assets or liabilities until the balance sheet balances.

What if I have a deficit (negative retained earnings)?

Negative retained earnings (accumulated losses) are supported. Clear Books Tax displays these correctly in brackets in the balance sheet.