Definition of Restricted cash:
Funds deposited in a separate account, often as a cushion against a possible loss or debt servicing, or some emergency.
Restricted cash, in contrast to unrestricted cash, is freely available for a company to spend or invest. Restricted cash refers to money that is held for a specific purpose and thus not available to the company for immediate or general business use.
Restricted cash appears as a separate item from the cash and cash equivalents listing on a company's balance sheet. The reason for the cash being restricted is usually disclosed in the accompanying notes to the financial statements. Cash can be restricted for a number of reasons, including debt reduction and capital investments.
How to use Restricted cash in a sentence?
- I had to put some restricted cash in there to provide a safety net for myself and my money in the future.
- Restricted cash can be used as collateral for a loan or for capital expenditures such as a factory upgrade or equipment purchase.
- 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, in contrast to unrestricted cash, is freely available for a company to spend or invest.
- You should probably keep some restricted cash available so that you have something to fall back on if times get tough.
- Restricted cash appears separately from cash on the balance sheet, while its purpose is disclosed in the financial statement footnotes.
- The restricted cash balance was still high as no emergency was ever experienced to warrant using those specific emergency funds.
Meaning of Restricted cash & Restricted cash Definition