Final answer:
Restricted assets should be separately disclosed from unrestricted assets on the balance sheet.
Step-by-step explanation:
The Financial Accounting Standards Board (FASB) is a private standard-setting body[1] whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the U.S.
The Financial Accounting Standards Board (FASB) indicates that restricted assets should be separately disclosed from unrestricted assets on the face of the statement of financial position (balance sheet). This is to provide transparency and ensure that users of the financial statements are aware of the existence of restricted assets and their impact on the organization's financial position. For example, if a nonprofit organization has restricted funds that can only be used for specific purposes, those funds would be shown separately from the organization's unrestricted funds on the balance sheet.