Is Retained Earnings a Current Asset?

Written by True Tamplin, BSc, CEPF®

Updated on January 02, 2023

No, retained earnings is not a current asset for accounting purposes. A current asset is any asset that will provide an economic benefit for or within one year.

Retained earnings refers to the amount of net income a company has left after paying dividends to shareholders. Retained earnings is recorded in the shareholder equity section of the balance sheet rather than the asset section, and usually does not consist solely of cash. For these reasons, retained earnings is not a current asset.

Is Retained Earnings a Current Asset FAQs

Is retained earnings a current asset?

No, retained earnings is not a current asset for accounting purposes.

What is a current asset?

A current asset is any asset that will provide an economic benefit for or within one year.

What is retained earnings?

Retained earnings refers to the amount of net income a company has left after paying dividends to shareholders.

Why would retained earnings be considered a non-current asset?

Retained earnings are recorded in the shareholder equity section of the balance sheet rather than the asset section and usually does not consist solely of cash. For these reasons, retained earnings is not a current asset.

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.