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Appropriated retained earnings

The portion of retained earning that is not available for dividends. To appropriate retained earnings, the company must record the partitioning of retained earnings. The company can use appropriated retained earnings for contingencies or big projects. Appropriating retained earning does not involve setting aside any cash. It only sends a signal to the balance sheet readers that dividends cannot be equal to the total retained earnings. See also inappropriate retained earnings.

 

 

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