Retained profit
Retained profit carried forward is the part of the balance sheet profit whose use has not been decided; it stays in equity and remains available for distributions in later years.
Definition
In small companies this is the usual route: the profit stays in the business, equity grows, and a distribution follows later when liquidity allows. There is no tax disadvantage, because profit tax falls due in the year the profit arises anyway.
The carry-forward also absorbs later losses without a capital loss arising. It is therefore a buffer, not an omitted decision.
Where to read it
What the software must be able to do
Check whether the carry-forward is rolled over automatically at year end and stays presented separately from the reserves. A single collective equity account loses that distinction.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Cost centre Current assets Debit and credit Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules