This last part of the article deals with non-current assets of a Balance Sheet. They consists of the Fixed Assets and Long Term Investments.
Let understand the following:
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WHAT ARE FIXED ASSETS
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Fixed Assets are unlike current assets:
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Which are NOT expected to be realised  or held for trading or sale
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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
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WHAT ARE LONG TERM INVESTMENTS?
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Long Term investments are:
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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.
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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
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WHAT ARE INTANGIBLE ASSETS?
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Intangible assets:
- have no physical existence and a long life. They include patents, copyrights, trademarks, etc.
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SUMMARY: TO RECAP FOR ASSET SIDE OF THE BALANCE SHEET
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Balance Sheet And Its Assets Side (Total Assets) consists of :
Current Assets+ Fixed Assets +Long Term Investments + Intangible Assets
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Related posts:
- Assets(Current Asset) Side Of The Balance Sheet(Part2of3)
- Balance Sheet And Its Assets Side(Part1of3)
- How To Account For Disposal Of Fixed Assets For Cash Or Traded In As Part Payment For Another Asset
- Profit Versus Cash