Permanently Restricted Assets


DEFINITION of 'Permanently Restricted Assets'

Assets of a not-for-profit organization that come with certain restrictions. Permanently restricted assets are any assets that are given to a not-for-profit by an outside individual or agency with restrictions on their use or purpose. Donations of such assets are not uncommon, as individuals or organizations making the donations may have certain preferences as to how the assets donated are used by the not-for-profit.

BREAKING DOWN 'Permanently Restricted Assets'

A common type of permanently restricted asset is the donation of real estate. For example, an individual or organization may donate a large chunk of real estate to a not-for-profit, such as a public university, with restrictions on the land to be only used for biological research rather than have the property resold for a capital gain at the university's discretion.

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