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Chapter 4 — Intercompany Matters With Noncontrolling Interest Implications

4.4 Capitalization of Retained Earnings by a Subsidiary

4.4 Capitalization of Retained Earnings by a Subsidiary

ASC 810-10
45-9 Occasionally, subsidiaries capitalize retained earnings arising since acquisition, by means of a stock dividend or otherwise. This does not require a transfer to retained earnings on consolidation because the retained earnings in the consolidated financial statements shall reflect the accumulated earnings of the consolidated group not distributed to the owners of, or capitalized by, the parent.