How are Net Position categories for Proprietary Funds typically reported?

Proprietary funds, which include enterprise funds and internal service funds, are used to account for a government's business-type activities. The net position for these funds is categorized in a manner that provides a clearer understanding of the resources available for operational and capital purposes.

The correct categorization is into three distinct groups: net investment in capital assets, restricted, and unrestricted.

• Net investment in capital assets reflects the value of capital assets that are used in operations, minus any related outstanding debt that was incurred to acquire those assets. This category shows the portion of the fund's net position that is tied to these capital assets and not available for immediate spending.

• Restricted net position represents resources that are subject to external restrictions on how they can be used, such as grants or regulations that dictate that certain funds must be spent on specific projects or purposes.

• Unrestricted net position is the portion that is not restricted in any way, which can be utilized at the discretion of the governing body for any purpose that supports the mission of the fund.

This classification helps stakeholders assess the financial health and flexibility of the proprietary funds, showing precisely how much of the net position is available for use and how much is tied up in assets or restricted for specific