Balance Sheet And Its Asset Side( Part 3 of 3)

June 2nd, 2006 Comments off
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WHAT ARE FIXED ASSETS?

 

 

Fixed Assets are unlike current assets:

 

  • Which are NOT expected to be realised  or held for trading or sale

 

  • The costs of the fixed assets are allocated over the period of the useful lives to generate the income associate with it. This follows closely to the matching concept.

 

  • Examples of Fixed Assets are:

 

  • Property

 

  • Plant & machinery

 

  • Motor Vehicles

 

  • Furniture & Fixtures

 

  • Air-conditioners

 

  • Office Rennovations

 

 

 

 

WHAT ARE LONG TERM INVESTMENTS?

 

 

Long Term investments  are:

 

  • investments a company intends to hold for more than one year.  Consist of stocks and bonds of other companies, real estate, and cash that has been set aside for a specific purpose or project.

 

  • also consist of the stock in a company’s affiliates and subsidiaries.

 

 

The difference between Short Term and Long Term investments lie in the company’s motive for owning them.

 

Short term investments consist of stocks, bonds, etc. a company has bought and will   sell shortly.  The investments made under long term investments may never be sold

 

 

 

WHAT ARE INTANGIBLE ASSETS?

 

Intangible assets:

·  have no physical existence and a long life. They include patents, copyrights, trademarks, etc.

 

 

SUMMARY: TO RECAP FOR ASSET SIDE OF THE BALANCE SHEET

 

Balance Sheet And Its Assets Side (Total Assets) consists of :

Current Assets+ Fixed Assets +Long Term Investments + Intangible Assets

 

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Financial Accounting

 
 

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