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

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