Restriction classification is an accounting attribute. Only funds given by an outside entity (i.e., gifts or income from endowments) may be recorded in a restricted account. All other types of income are classified as unrestricted on the university's financial statements.
The attribute in the Kuali Financial System (KFS) that represents the restriction classification is the Account Restricted Status Code.
Temporarily restricted (TR) funds should be spent first! Financial Accounting Standards require that restricted funds be spent (according to donor designations) before UR funds are used. Departments should monitor activity to see if TR funds are being spent before UR funds.
The "simultaneous release" (sometimes called the "could have spent it") concept stems from the following principle, which is addressed in the Financial Accounting Standards Board (FASB).
“If an expense is incurred for a purpose for which both unrestricted and temporarily restricted net assets are available, a donor-imposed restriction is fulfilled to the extent of the expense incurred, unless the expense is for a purpose that is directly attributable to another specific, external source of revenue.” FASB (ASC 958-205-45-11)
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