Sift 3 cups powdered sugar and a pinch of salt into a large mixing bowl.

Cut 1 cup unsalted butter (room temperature) into cubes and add to the sifted sugar and salt.

Using an electric mixer, start on low speed to combine, then increase to medium-high and beat for 3–4 minutes until the mixture becomes thick, smooth, and creamy. At first it may look crumbly or grainy; stop once it is uniformly creamy. Scrape down the bowl and beaters with a spatula as needed.

Add 2 teaspoons coconut extract and mix until incorporated. Taste and, if a stronger coconut flavor is desired, add up to 1 additional teaspoon (for a total of 2–3 teaspoons) and mix again.

Add water 1 teaspoon at a time, whipping after each addition, until the frosting reaches the thickness you want. Continue until you achieve a spreadable or pipeable texture; you will likely need very little water. Do not exceed the 1–2 tablespoons total called for.

If the frosting is too soft for piping, chill it briefly (few minutes) to firm up; if too stiff, add another 1 teaspoon of water and mix.

Use the frosting to spread or pipe onto room-temperature baked goods. The frosting tastes best at room temperature.

Store any leftover frosting in an airtight container. It will keep for up to five days without refrigeration; to extend shelf life refrigerate.