[Casey]

Hello Caroline. I agree with Wade that releasing a restriction is generally a reclassification rather than a change in total net assets. In simple terms, the amount moves from restricted net assets into the appropriate unrestricted category once the restriction has been satisfied. The organisation’s total net assets do not change simply because of that reclassification. On the statement of financial position, you would therefore see the restricted portion decrease while the unrestricted portion increases. It is essentially a way of showing that those resources are now available for their permitted use.

• This reply was modified 4 days, 6 hours ago by  Casey.