How should unspent proceeds of capital debt and the debt itself be considered in calculating net assets?

In measuring net assets, unspent proceeds of capital debt and the debt itself are not included in net assets. This approach aligns with the principles of accounting that focus on the recognition of resources that are available for use in operations or investments. Net assets are intended to reflect the resources currently available to the organization. Since unspent proceeds from capital debt represent funds that have not yet been utilized for their intended purpose, they do not enhance the current resources needed for operational or capital activities. Similarly, the capital debt itself represents a liability, not an asset. By treating these proceeds and the associated debt entirely outside of net assets, stakeholders can obtain a clearer picture of the organization's financial position, specifically what assets are currently available for funding future operations or obligations. This ensures a more accurate representation of net assets as it gives priority to funds that are actually in use or readily available.