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.
“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.” Financial Accounting Standards Board (FASB) (Accounting Standards Codification 958-205-45-11).
Simultaneous release allows a not-for-profit organization to recognize a restricted contribution directly in unrestricted net assets if the restriction is met in the same period that the revenue is recognized. Simultaneous release is followed to reduce administrative burden and eliminated for financial statement presentation purposes.