Under the classified approach, how are restricted assets used for repaying maturing debt classified?

In the classified approach to financial statements, restricted assets that are specifically earmarked for the repayment of maturing debt are recognized as current assets. This classification is appropriate because the restrictions on these assets indicate that they will be used in the near term to settle liabilities that are due within the current operating cycle, generally one year.

Additionally, the corresponding maturing debt is classified as a current liability since it is due within the same timeframe. This matching ensures that the assets and liabilities related to the payment of that debt are presented in a manner that reflects their liquidity and the timing of cash flows, providing clearer information to the users of the financial statements.

This approach emphasizes the importance of understanding the liquidity position of the organization and highlights the connection between restricted assets and their intended use in satisfying current obligations.