CEVAP:

To reserve cash or to be conservative about possible risks or some specific reasons such as loan agreements, to distribute the regular amount of dividends etc. there may be some restrictions on retained earnings. Thus, some amount of retained earnings may be defined as restricted retained earnings. Restricted retained earnings amount presents the amount of that is unavailable for distribution to the shareholders. In other words, restricted retained earnings show a reduction from a possible amount of dividends. On the footnotes of the financial statements, all of the details should be explained clearly. 

Usually, the restrictions may occur in three different types: Legal restrictions, contractual restrictions, and voluntary restrictions.