Retained earnings accounting refers to the part of a company’s profits that are kept within the company and not shared with shareholders, instead being reinvested in the business. These earnings are accumulated over time and remain invested in the company’s assets, such as research and development or infrastructure. Companies may also allocate some retained earnings to pay dividends or repurchase stocks, but they are typically used to fund growth opportunities. Keeping track of retained earnings is a key component of financial statements, giving investors insight into how a company has been generating and using its profits over time.