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Restricted cash refers to money that is held for a specific purpose, meaning it's not available for immediate or general business use. Restricted cash appears separately from cash on the...
In other words, amounts generally described as restricted cash or restricted cash equivalents are included on the statement of cash flows along with cash and cash equivalents. As a result, a transfer between restricted and unrestricted cash or cash equivalent accounts is not reported as a cash flow.
What is Restricted Cash? Restricted cash refers to cash that is held onto by a company for specific reasons and is, therefore, not available for immediate ordinary business use. It can be contrasted with unrestricted cash, which refers to cash that can be used for any purpose.
Explore the nuances of restricted cash, its types, accounting practices, and its impact on financial statements and cash flow management. Companies often set aside portions of their cash for specific purposes, a practice known as restricted cash.
Restricted cash refers to funds that are not available for immediate or general business use, typically set aside for specific purposes. These purposes can range from debt servicing, capital projects, or to satisfy regulatory or contractual obligations.
Restricted cash is that portion of the cash set aside for a specific purpose and is not available for general business use on an immediate basis. This cash is usually held in a special account (for example, an escrow account), so it remains separate from the rest of a business' cash and equivalent.
Unpack the concept of restricted cash, its role in liquidity metrics, and how it influenced Zoom's financials from 2019 to 2021.
The term restricted cash refers to cash set aside for a specific purpose, making it unavailable to the company for immediate or general corporate use. Conversely, unrestricted cash is readily available for general business use on an immediate basis.
What is Restricted Cash? Restricted cash is a designation placed on a certain amount of cash by the board of directors. This restriction is intended to keep those funds from being used for general operating activities.
Restrictions can prevent them from being included as cash equivalents even if they otherwise qualify. For example, short-term highly liquid investments are not cash equivalents if they are purchased with resources that have donor-imposed restrictions that limit their use to long-term investment.