Nested Classes and Interfaces - The Java Programming Language - page 200

balance -= amount;
lastAct = new Action("withdraw", amount);
}
// ...
}
The class Action records a single action on the account. It is not declared
static , and that means its objects exist relative to an object of the en-
closing class.
The relationship between an Action object and its BankAccount object is
established when the Action object is created, as shown in the deposit
and withdraw methods. When an inner class object is created, it must be
associated with an object of its enclosing class. Usually, inner class ob-
jects are created inside instance methods of the enclosing class, as in
deposit and withdraw . When that occurs the current object this is associ-
ated with the inner object by default. The creation code in deposit is the
same as the more explicit
lastAct = this.new Action("deposit", amount);
Any BankAccount object could be substituted for this . For example, sup-
pose we add a transfer operation that takes a specified amount from
one account and places it in the current accountsuch an action needs to
update the lastAct field of both account objects:
public void transfer(BankAccount other, long amount) {
other.withdraw(amount);
deposit(amount);
lastAct = this.new Action("transfer", amount);
other.lastAct = other.new Action("transfer", amount);
}