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Financial Accounting for Local and State School Systems: 2009 Edition
NCES 2009-325
June 2009

Exhibit 5.  Net asset classification
Invested in capital assets, net of related debt
  • All capital assets (including restricted capital assets) net of accumulated depreciation and reduced by outstanding balances of debt relating to the acquisition, construction, or improvement of these assets.
  • If the entity has capital assets but no related debt, the account should be titled "invested in capital assets" so that readers are not misled.
Restricted net assets
  • Net assets on which limitations have been placed by creditors, grantors, contributors, laws, and regulations.
  • Also, internal actions may lead to restricted net assets in some cases such as constitutional provisions or enabling legislation that is deemed to be legally enforceable.
Unrestricted net assets
  • All other net assets not included in the "invested in capital assets, net of related debt" category or the "restricted net assets" category.
  • Internal designations may not be shown in this statement.