Appropriation of Retained Earnings
Written by True Tamplin, BSc, CEPF®
Updated on July 10, 2021
What is meant by the appropriation of retained earnings?
A restriction of retained earnings that occurs when the board of directors transfers a portion of the retained earnings account into a separate appropriated retained earnings account in order to indicate to stockholders, and to others, that the balance in the appropriated retained earnings account is not available for dividends.