Question Tag: Financial Terminology

i) Retained Earnings:
The retained earnings of a company with shares are the reserves, as defined in Section 70 of the Companies Act, less the amounts of money attributable to:

• An unrealized 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 share capital.
• A balance standing to the credit of the share deals account immediately before the ascertainment of the retained earnings.

ii) Unclaimed Dividend:
Unclaimed dividends are dividends declared by a company but remain unclaimed by the shareholder entitled to the dividend. If unclaimed for a period of three months, the company shall open an interest-bearing unclaimed dividend account and credit to that account the total amount of the unclaimed dividend. If payment of the dividend cannot be made or is not claimed within a further period of twelve months, the company shall pay the amount of the unclaimed dividend plus interest accrued on the amount to the Registrar, who will manage the funds and ensure that they are safely kept until claimed by the rightful owner.