retained earnings and other components of equity

Retained earnings are simply the accumulation of profits ( not distributed by way of dividend or otherwise ) generated from the trading activities of the group.

"Other components of equity" are all the other elements "belonging" / attributable to the equity shareholders ie to those who are financing the activities of the group.

In a non-technical sense, the obvious "other components" include share capital, share premium, revaluation reserve, general reserve, non-controlling interests

There are situations - for example, when looking at mixed or compound instruments - when, having measured the debt element, the balance between face value and present value of debt will be credited to an "other component of equity"

Does that answer your question?

can u plz give some examples of what can come under either headings?

can we treat all the items of either headings under just group retained earnings?

thnx alot

ok, here are some examples of what might come under the headings listed above:

Share capital the nominal value of the equity shares in issue

Share premium any premium which has been received on the issue of equity shares in so far as it hasn't been used by eg financing a bonus issue

Revaluation reserve accumulated revaluation surpluses on TNCA in so far as not subsequently reversed or released into retained earnings

General reserve the accumulation of amounts diverted from retained earnings into a reserve specifically designed to set aside funds for a defined project where the company will need the funds later

Non controlling interest ( I don't believe that I'm having to write all this for a P2 student! ) the accumulated entitlement of the minority shareholders to the assets of the subsidiary copanies ie the extent to which the nci is financing the group's activities

"Other component of equity" if looking at mixed or compound instruments – when, having measured the debt element, the balance between face value and present value of debt will be credited to an “other component of equity”

I can't believe that that has helped!

thnx alot. i knew all abt retained earnings but i was a bit confused with other components of equity