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appropriation of retained earnings (FI-LC)

Consolidation (FI-LC)

The appropriation of retained earnings is a systematic statement that shows the relationship between the annual net income and the retained earnings of a company or consolidated group.

Companies that represent legal entities disclose the appropriation of retained earnings, stating

In practice, retained earnings statements are, in part, not prepared for non-legal entities or consolidated groups. The Consolidation system, nevertheless, requires at least a simplified appropriation of retained earnings using dedicated Financial Statements (FS) items for each company.

The appropriations of each company are combined to form the appropriations of retained earnings for the entire group (also called the group appropriation of retained earnings). Additional items can be used during this process to state the changes in minority ownership.

The appropriation of retained earnings can either be integrated on the balance sheet or be stated as an addendum to the income statement:

The method used affects the retained earnings item on the balance sheet, as well as the balance to be carried forward.

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