Board-designated Restriction

 

 

Board-designated Restriction

It can be defined as a restriction imposed by the Board of directors on the use of an asset. In case of not for profit organizations such an asset is reported under unrestricted net assets. Whereas in the case of for-profit organizations, this restriction is monetary, and the restriction amount is transferred from the retained earnings account to a separate equity account that bears the name of the said asset.

 

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