Legal Definitions - surplus earnings

Surplus earnings refer to the excess of corporate assets over liabilities within a given period, usually a year. It is a term used in the context of corporate finance and accounting.

For example, if a company's assets are worth $1 million and its liabilities are worth $500,000, then its surplus earnings for the year would be $500,000.

Surplus earnings are important because they indicate the financial health of a company. A company with high surplus earnings is considered financially stable and may be more attractive to investors.