If the board (and not an outside donor) wants to restricted assets, it is called "Board Designated' and it is still "Unrestricted" in an accounting sense since the board can undesignated it as well. Most likely the asset an organization wants to designate (or restrict) is cash, but it could be any other asset (i.e. real estate that can't be sold and is restricted to be a park). Currently, for accounting, there are no rules as to how you segregate the asset you want to restrict. For the financial statements, the asset itself is not shown as restricted. In the Net Assets section (equity) of the balance sheet, the total amount that the organization has restricted or designated is broken out from what is unrestricted. It does not show what the restricted asset is or why its being restricted. The note to the financials explains what it is.
In a practical sense, many organizations do open up a separate bank account to move funds to that are restricted or designated. This is not necessary though (unless a funder requires funds to be in a separate bank account). If it's a long term goal (i.e. a church saving to buy a building in 20 years) opening a savings account makes sense. Also , all restrictions and designations need to be tracked - amounts added to restricted (or designated) funds , amounts released from restrictions (or designated). This can be confusing , especially if there are multiple designations and restrictions going on. It is usually not practical to track this in your accounting software (i.e. Quickbooks). The best approach I find is to track on an excel schedule. Released from restrictions just means funds were expended on their purpose. If 10K was restricted for use in a future year for a program, the amounts are "released" from restrictions in the future period when that amount is spent on the program....