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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  2. Do working capital funds expire?

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  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
  5. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
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