Appropriated Retained Earnings

What are 'Appropriated Retained Earnings'

Appropriated retained earnings are any unappropriated retained earnings that are specifically not to be used for dividend payments. Appropriated retained earnings can be used for many purposes, such as improving infrastructure, R&D or marketing. They are not passed on directly to shareholders in any form.

BREAKING DOWN 'Appropriated Retained Earnings'

Any amount of appropriated retained earnings that are not used for such purposes are then poured back into dividend payments. For example, a company uses $10 million of appropriated retained earnings to build a new factory. But the cost of the factory comes in under budget, so the firm will allocate the remaining funds back into the unappropriated retained earnings.

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RELATED FAQS
  1. How are retained earnings related to a company's income statement?

    Understand what a company's statement of retained earnings represents and how it is related to a company's other financial ... Read Answer >>
  2. Which transactions affect the retained earnings statement?

    Retained earnings are the portion of a company's income that management retains for internal operations instead of paying ... Read Answer >>
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    Find out how distribution of dividends affects a company's retained earnings, including the difference between cash dividends ... Read Answer >>
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