Retained net surplus (deficit)
Retained net surplus (deficit) refers to accumulated retained earnings or accumulated losses carried forward.
OpenFinancial Dictionary
Accounting & Finance Terms (English)
Accounting and Finance Terms Explained
Explore accounting, finance, auditing, taxation, and economics terms explained in clear English. Each entry provides a definition, a detailed explanation, practical uses, and examples where available.
Use the search box below to find a term by its name, definition, application, or related financial concept.
Retained Profit
Retained profit is another term for retained earnings—the accumulated profits kept within the company.
OpenRetire
Retire means to stop working permanently, usually upon reaching a certain age or by agreement, transitioning to retirement.
OpenRetirement
Retirement is leaving employment permanently, typically due to age or agreement, and transitioning to post-employment status.
Openretirement of assets
Retirement of assets means disposing of long-term assets (sale, scrapping, or write-off) when they are no longer in use.
Openretirement of bonds
Retirement of bonds means repurchasing or redeeming bonds previously issued by the company before or at maturity.
OpenRetirement of stock
Retirement of stock refers to buying back shares and removing them from circulation (treasury shares cancellation or similar).
Openretrospective adjustment
A retrospective adjustment applies a new accounting policy to prior periods as if it had always been used, adjusting comparatives when required.
OpenReturn
Return generally means the benefit received from an investment or activity, often expressed as a percentage (e.g., investment return).
OpenReturn And Allownce
Returns and allowances are reductions of gross sales due to returned goods or price allowances granted to customers for defects or other reasons.
OpenReturn of Capital
Return of capital is a distribution to investors that is not a dividend from earnings; it reduces the investor’s invested capital.
OpenReturn on assets (ROA)
Return on assets (ROA) measures profitability relative to total assets, commonly calculated as net income divided by average total assets.
Openreturn on assets ratio
Return on assets ratio is another name for ROA, comparing net income to average total assets to evaluate efficiency in using assets.
OpenReturn On Capital Employed - ROCE
ROCE measures how efficiently capital employed generates profit, commonly calculated as operating profit (EBIT/PBIT) divided by (total assets minus current liabilities).
OpenReturn On Equity (ROE)
Return on equity (ROE) measures profitability relative to shareholders’ equity, commonly net income (after preferred dividends) divided by average equity.
Openreturn on equity ratio
Return on equity ratio is ROE, comparing net profit attributable to owners to average shareholders’ equity.
OpenRETURN ON INVESTED CAPITAL (ROIC)
ROIC measures the return generated on invested capital (debt and equity) used in operations; formulas vary by context but focus on after-tax operating profit relative to invested capital.
OpenReturn on Investment (ROI)
ROI is commonly calculated as profit divided by investment cost and is used to compare alternative projects and investment opportunities.
OpenReturn on Sales
Return on sales measures profitability per unit of sales, commonly calculated as pre-tax income (or operating profit) divided by total sales.
OpenRevaluation Surplus
Revaluation surplus is the increase in carrying amount of an asset from revaluation, recognized in equity (OCI) under applicable standards unless it reverses a prior decrease.
Openrevenue
Revenue is the inflow of economic benefits from ordinary activities, such as sales of goods or services, resulting in increases in equity (other than owner contributions).
OpenRevenue
Revenue is the income generated from a company's main activities such as selling goods or providing services. It represents the value delivered to customers and is recognized when earned, regardless o...
OpenRevenue
Revenue reflects the inflow of economic benefits during a period and is recognized when performance obligations are satisfied (e.g., delivery of goods or rendering services).
OpenRevenue recognition
Revenue recognition is recording revenue when (or as) performance obligations are satisfied in accordance with the applicable standard.
OpenRight-of-use asset
A right-of-use (ROU) asset represents the lessee’s right to use the underlying asset over the lease term.
OpenRisk Management
Risk management is the process of identifying, assessing, and monitoring risks to achieve objectives within an acceptable risk level.
OpenRisk of material misstatement
Risk of material misstatement is the risk that financial statements contain material errors, arising from inherent risk and control risk combined.
OpenROA
ROA is an abbreviation for Return on Assets, a profitability ratio that relates net income to average total assets.
OpenROCC
ROCC stands for Return on Committed Capital, measuring returns generated from capital that is committed to operations or projects.
OpenROE
ROE stands for Return on Equity, measuring profitability relative to shareholders’ equity.
OpenROG
ROG stands for Receipt of Goods, referring to the process/documentation confirming goods were received into inventory.
OpenROI
ROI stands for Return on Investment, a broad measure of profitability relative to the amount invested.
OpenROI (Return on Investment)
Return on Investment (ROI) measures profitability from an investment. A common approach is Net Profit ÷ Investment Cost, though methods vary by context.
OpenROIC
ROIC stands for Return on Invested Capital, measuring returns generated from capital invested in the business.
OpenRPA in Accounting
RPA in accounting automates repetitive accounting tasks such as data entry, reconciliations, and reporting to improve efficiency and accuracy.
OpenSaaS Metrics
SaaS Metrics are key performance indicators for subscription software businesses—such as MRR, ARR, churn rate, CAC, LTV, and retention—used to evaluate growth, profitability, and customer value over t...
OpenSales
Sales represent revenue earned from transferring ownership of goods or providing services in accordance with revenue recognition principles.
OpenSampling
Sampling helps auditors obtain evidence efficiently, but it involves sampling risk; appropriate sample design and selection are important.
OpenSampling risk
Sampling risk is the risk that conclusions drawn from an audit sample differ from conclusions if the entire population were tested.
Openserial bond
Sequential bonds are the process of issuing bonds with multiple payment dates rather than full maturity by a certain date
OpenShare capital
Share capital is the amount invested by shareholders in exchange for issued shares (par or stated value plus any related considerations, depending on structure).
Openshareholder
A shareholder is a person or entity that legally owns one or more shares in a company and may have rights to dividends and voting.
OpenShort-term lease
A lease with a term of 12 months or less.
OpenSignificant risks
Significant risks are risks that require special audit consideration due to their nature, complexity, or likelihood of material misstatement.
Opensimple interest
Simple interest is calculated only on the principal amount, without including interest previously accrued (unlike compound interest).
Opensingle-step income statement
A single-step income statement groups all revenues together and all expenses together, then shows net income as the difference.
OpenSmart Contracts
Smart contracts are self-executing digital agreements where terms are automatically enforced through blockchain code.
OpenSolvency
Solvency focuses on capital structure and long-term sustainability and is commonly assessed through leverage ratios and interest coverage.
Openspecific identification method
Specific identification assigns the actual cost of each specific inventory item to that item, suitable for unique or high-value items.
Opensplit-off point
The split-off point is the stage in a joint production process where products become separately identifiable and can be sold or processed further.
Open