Project Finance 'Waterfall' (Restricted Cash)
Moving operating cash into restricted 'Debt Service Reserve Accounts' (DSRA) as required by lenders.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Restricted Cash - Debt Service Reserve (DSRA) | Asset (+) | 1,500,000.00 | - |
| Cash and Cash Equivalents (Unrestricted) | Asset (-) | - | 1,500,000.00 |
💡 Accountant's Note
Infrastructure projects are funded by 'Non-Recourse' debt. Lenders require a 'Cash Waterfall.' Before the operator can pay dividends to shareholders, they must fill up a Reserve Account (usually 6 months of debt payments). This cash is no longer 'Cash & Cash Equivalents' for liquidity reporting; it is Restricted Cash.
Practitioner & Systems Framework
💻 ERP Architecture
Requires a distinct G/L code and a 'Restriction' flag for the Cash Flow Statement (ASC 230).
⚠️ Audit Flags
Breach of DSCR (Debt Service Coverage Ratio). If the waterfall isn't funded, the project is in technical default, which could lead to the 'Concession Asset' being reclassified as current or impaired.
📄 Required Documentation
Monthly Trustee Report from the bank and the Credit Agreement 'Waterfall' definitions.
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Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
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