Governmental Fund Balance Classifications: Nonspendable to Unassigned
Fund balance questions get easier when you rank the categories from resources that cannot be spent to resources with no specific constraint.
Nonspendable
Amounts are nonspendable when they are not in spendable form or are legally or contractually required to remain intact.
Restricted
Restricted fund balance reflects externally enforceable constraints imposed by creditors, grantors, contributors, laws, or constitutional provisions.
Committed and assigned
Committed amounts are constrained by formal action of the government's highest level of decision-making authority. Assigned amounts reflect an intended use that is less formal than a commitment.
Unassigned
Unassigned fund balance is the residual category in the general fund and can also reflect certain negative residual amounts in other governmental funds.
The takeaway
Think in order of constraint strength: nonspendable, restricted, committed, assigned, then unassigned.
Related Summit resources
FAQ
Which category reflects externally imposed constraints?
Restricted.
Which category requires formal action by the highest decision-making authority?
Committed.
Which category is generally the residual in the general fund?
Unassigned.