Section 71 - Meaning of “retained earnings”

The retained earnings of a company with shares is the reserves, as defined in section 70, less the amounts of money attributable to

(a) an unrealised appreciation in the value of an asset of the company, other than an appreciation in the value of an asset as would, under normal accounting principles, be credited to the income statement, unless the amount of the appreciation has been transferred to stated capital; and

(b) a balance standing to the credit of the share deals account immediately before the ascertainment of the retained earnings.