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:

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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