restricted retained earnings

restricted retained earnings definition - business

restricted retained earnings

The retained earnings that are unavailable for the payment of dividends to common stockholders. For example, dividend arrearages on cumulative preferred stock must be paid before any dividend payments can be made to common stockholders. Therefore, the arrearages will result in restricted retained earnings. Also called restricted surplus.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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