restricted retained earnings

Restricted Retained Earnings

The earnings of a publicly-traded company that it is legally or contractually obligated not to pay as dividends. The most common reason for earnings to become restricted is the existence of dividends in arrears. That is, if a company has not made legally promised dividend payments to preferred stockholders, it must make these payments before it can pay any other dividends. Thus, the earnings become known as restricted retained earnings. Restricted retained earnings are also called the restricted surplus.

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.
References in periodicals archive ?
067bn was unrestricted retained earnings and USD479m was restricted retained earnings.
At December 31, 2013, the FHLBNY's level of restricted retained earnings was USD157.
0 billion is unrestricted retained earnings and approximately USD300 million is restricted retained earnings.
At September 30, 2013, FHLBNY's level of restricted retained earnings was USD139.
The FHLBNY said it increased its restricted retained earnings by USD 15.

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