Alaska Statutes
Article 4. Corporate Finance.
Sec. 10.06.358. Distributions; conditions; financial statements and determinations.

(a) A corporation or a subsidiary of the corporation may not make a distribution to the corporation's shareholders as defined in AS 10.06.990 unless
(1) the amount of the retained earnings of the corporation immediately before the distribution equals or exceeds the amount of the proposed distribution; or
(2) immediately after giving effect to the distribution the
(A) sum of the assets of the corporation, exclusive of goodwill, capitalized research and development expenses, evidences of debts owing from directors or officers or secured by the corporation's own shares, and deferred charges, would be at least equal to one and one-fourth times its liabilities, not including deferred taxes, deferred income, and other deferred credits; and
(B) current assets of the corporation would be at least equal to its current liabilities or, if the average of the earnings of the corporation before taxes on income and before interest expense for the two preceding fiscal years was less than the average of the interest expense of the corporation for those fiscal years, at least equal to one and one-fourth its current liabilities.
(b) For purposes of this section,
(1) in determining the amount of the assets of the corporation, profits derived from an exchange of assets may not be included unless the assets received are currently realizable in cash;
(2) “current assets” may include net amounts that the board has determined in good faith may reasonably be expected to be received from customers during the 12-month period used in calculating current liabilities under existing contractual relationships obligating the customers to make fixed or periodic payments during the term of the contracts after in each case giving effect to future costs not then included in current liabilities but reasonably expected to be incurred by the corporation in performing the contracts.
(c) For the purposes of this chapter, the amount of a distribution payable in property shall be determined on the basis of the value at which the property is carried on the corporation's financial statements in accordance with this section.
(d) Only a corporation that classifies its assets as current assets and fixed assets in accordance with this section is governed by (a)(2)(B) of this section.
(e) For the purposes of this section, the board of directors may base a determination that a distribution is not prohibited either on financial statements prepared in accordance with generally accepted accounting principles or on the basis of accounting practices and principles that are fair and reasonable in the circumstances.
(f) Financial statements and determinations prepared or arrived at in accordance with generally accepted accounting principles are fair and reasonable. The fair and reasonable quality of statements and determinations prepared under other practices and principles shall be proved by the corporation.

Structure Alaska Statutes