Asset-restricted

The term 'asset-restricted' refers to financial resources that are limited for specific purposes or to particular uses, often due to legal, regulatory, or organizational stipulations. These assets cannot be readily utilized for general operations or other expenditures until the designated purpose is fulfilled. asset-restricted accounts often include funds earmarked for future projects, retirement benefits, or designated donations.

Asset-restricted meaning with examples

• The corporation has a significant amount of asset-restricted funds allocated for employee retirement plans, ensuring that the employees' future financial needs are strictly met and not mixed with general operating expenses.
• Due to the grant conditions, the university was forced to hold a portion of its budget in asset-restricted status, preventing it from using those funds for immediate campus improvements until the grant project is completed successfully.
• In their financial report, the non-profit organization disclosed that a large share of their contributions were asset-restricted, meaning they could only be utilized for specific programs aimed at community development and outreach.
• When investing, individuals should be mindful of whether their purchases will lead to asset-restricted funds, as investing in certain anatomical structures can tie up resources for long durations without flexibility for other needs.
• Following a recent audit, it was identified that several asset-restricted accounts had not been monitored effectively, restricting the organization’s ability to access crucial liquidity for ongoing projects and operational costs.