Question

Can someone please explain to me what is unrestricted net position, restricted net position, and change in net position?

Also what would a student or parent care about when looking at the financial statements of a University?

Answer 1

Unrestricted Net position: It is the residual mount of the net positions that is not included in the net investment of capital assets. It is calculated by subtracting net equity position in FIXED ASSETS from UNRESTRICTED NET ASSETS.

Restricted net position: Restricted net position consists of restricted assets less liabilities and deferred inflows of resources related to those assets.

Change in net Positions: It is calculated by subtracting the initial cost of the setup from the current value of the position.

If current value is higher than the cost incurred, then it is considered to be a positive change in position or else negative.

While looking at the balance sheet it is important to take into consideration 3 components:

1. Net Investment in capital assets

2. Restricted capital assets

3. Unrestricted capital assets