Restricted Asset

DEFINITION of 'Restricted Asset'

Money or other items of value received by or promised to an organization, the use of which is legally or contractually restricted. Restricted assets are also subject to special accounting procedures. Collateral can be viewed as a restricted asset, especially when the lender requires that it maintain its current value.

BREAKING DOWN 'Restricted Asset'

An example of a restricted asset is the proceeds from a revenue bond. The proceeds the city receives from this type of municipal bond must be used for their stated purpose (e.g., improving roads, building a new high school auditorium, upgrading sewers, etc.). The opposite of a restricted asset is an unrestricted asset.

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RELATED FAQS
  1. What are restricted shares?

    Understand what a restricted share is. Learn why a company would issue restricted shares to employees and why an employee ... Read Answer >>
  2. Why won't my broker allow me to sell one stock and buy another on the same day?

    There are two likely reasons why a customer would be unable to buy and sell a stock in the same trading day. For simplicity's ... Read Answer >>
  3. Are current assets liquid or capital?

    Take a deeper look at liquid current assets for businesses and individuals, and learn how they differ from other types of ... Read Answer >>
  4. Why do companies issue debt and bonds? Can't they just borrow from the bank?

    Companies issue bonds to finance operations. Most companies can borrow from banks, but view direct borrowing from a bank ... Read Answer >>
  5. How is trading volume regulated by the Securities and Exchange Commission (SEC)?

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  6. A customer has the following in his long margin account. Market value: $18,000, ...

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