Permanently Restricted Net Assets

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Permanently Restricted Net Assets

Cash or other assets that are not needed to pay liabilities but that still must never be spent freely. Permanently restricted net assets may be earmarked for a specific purpose; alternately, law or regulation may require the permanent restriction of some net assets. See also: Temporarily Restricted Net Assets.
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Instead, the presentation should include all activity by three categories: unrestricted, temporarily restricted and permanently restricted assets.
A common problem has been separating the unrestricted income and/or capital appreciation that had been "reinvested" all or in part, sometimes in accordance with a predetermined "spending policy" with the corpus of the permanently restricted assets from which it came.