Restricted Cash


DEFINITION of 'Restricted Cash'

Monies earmarked for a specific purpose and therefore not available for immediate and general use by an organization. Restricted cash, if the amount is material, is shown separately from cash and equivalents on the balance sheet. The purpose for which the cash is restricted is generally disclosed in the notes to the financial statements.

BREAKING DOWN 'Restricted Cash'

Restricted cash can be designated for a range of purposes such as loan repayment, equipment purchase or investments. It may be classified as a current or non-current asset, depending on when it is expected to be used. Expected usage of restricted cash within one year of the balance sheet date would necessitate it to be classified as a current asset; expected usage more than a year out would require it to be classified as a non-current or long-term asset.

  1. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  2. Current Assets

    A balance sheet account that represents the value of all assets ...
  3. Noncurrent Assets

    A company's long-term investments, in the case that the full ...
  4. Material Amount

    The movement of a security's price to the extent that it confirms ...
  5. Cash And Cash Equivalents - CCE

    An item on the balance sheet that reports the value of a company's ...
  6. Footnotes To The Financial Statements

    Additional information provided in a company's financial statements. ...
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  1. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  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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