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What is the main difference between Residual income (Ri) and Retained Earning (Re)?

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Question ajoutée par Raed Alotaibi , Performance and Professional development Manager , Social Development Bank
Date de publication: 2017/04/04
Linufer Naranath
par Linufer Naranath , Accountant , AL TAMIMI & COMPANY

Residual Income is the income earned over and above the required returns. Required returns is the minimum returns required by the shareholders to invest in a specific venture or organisation. Usually Residual income is calculated in order to rank the divisions of the same organisation and usually is the basis for Divisional Manager's Bonus.

 

Retained Earnings is the income retained or reinvested in the business after paying out the dividend.

Celeste Ann Mascarenhas
par Celeste Ann Mascarenhas , Health Care Assistant, Level 3 Nursing , Carlton Court Care Home

Residual Income is the income that a person earned from a previously completed transaction every month.  (Products purchased and bonuses or CAB's earned from the sales on the amount of points like 2 points on wellbeing products or 3 points on Energy in an ACN business.

Retaining income is an amount kept aside by the company for a person after paying their contribution, given to understand the company contribution too for example a 1 percent pension paid by the person and 1 percent paid by the company into the person pension depending on the qualifying factor of the individual like a permanent staff or a 22 hours staff.

Residual income builds up and it is willable.  Retaining income builds up too but not willable.

Residual  income is not taxable.  Retaining income is taxable.

Retaining income depends on the income earned in the month . 

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