The cash which a business has restricted to purchase a long-term asset should be reported on the balance sheet under the asset heading Investments. Investments is the first of the long-term asset headings and it is positioned immediately after current assets.

The cash restricted for a long-term asset is not reported as part of the company's current assets because the cash is not available to pay current liabilities. Expressed another way, when the business restricts its cash for the purchase of a long-term asset, the business must reduce the amount it reports as working capital (which is current assets minus current liabilities).

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