Know The Components in The Asset Side Of A Balance Sheet(Part3of3)

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