Restricted Asset

  

Categories: Accounting

It's an asset. But you can't sell it. So it carries a discount. That $100,000 country club membership? Yes, it's an asset. But you can only sell it through the club's "brokerage department," for which they will take a hefty 30% commission. So yes, you paid $100k upfront, plus monthly dues for years. And yes, it's an asset. It's just not like 100 shares of AMZN, which you can sell in 5 seconds through your broker. When you do go to sell a restricted asset, you have hoops to jump through, just to begin the process of selling, let alone suffer a restricted-buyer marketplace. That country club doesn't allow just anyone to bid on a new membership; applicants must first pass the sniff test of The Five Blue-Haired Old Ladies before they can even think about writing that check. Any asset that is restricted like this, for personal or business accounting, carried a big discount, and all kinds of caveats around what its actual value is.

And yeah, you won't miss this club.

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