There are three types of assets 1. Fixed assets Those assets which will be used by the company for a long period of time. a) Tangible assets: those assets which we can see and touch and exp Land & Buildings, Plant & Machinery,Furniture, fixtures and fittings b) Intangible assets: Those assets which we can't see and touch like Goodwill, Patents, Copyrights, Trade Mark etc 2. Current assets Those assets which can be easily converted into cash within one year like cash in hand, cash at bank, Bills receivable, stock etc 3. Fictitious assets: its not the actual assets , its the expenditure occurred at the tine of commencement of firm ( capital expenditure )like preliminary expenses, discount on issue on debenture/shares, underwriting commission etc
Assets are anything of value that is owned by a company, whether fully paid for or not. These range from cash, inventory, and other "current assets" to real estate, equipment, and other "fixed assets." Intangible items of value to a company, such as exclusive use contracts, copyrights, and patents, are also regarded as assets.
1)Fixed Asset :- Expenses which is paid for generating income for more than one financial year e.i. Plant & Machinery, Building, Furniture a)Tangible Asset :- asset which can be physicaly massured and touch e.i. Plant&Machinery, Building b)Intangible Asset :- asset which can't physicaly massured and touch e.i. Trade mark Goodwill 2)Current Asset :- Aseet which can be eassily converted in cash e.i. cash in hand, cash at bank, stock 3)Fictitious assets: its not the actual assets , its the expenditure occurred at the tine of commencement of firm ( capital expenditure )like preliminary expenses, discount on issue on debenture/shares, underwriting commission etc
)Fixed Asset :- Expenses which is paid for generating income for more than one financial year e.i. Plant & Machinery, Building, Furniture a)Tangible Asset :- asset which can be physicaly massured and touch e.i. Plant&Machinery, Building b)Intangible Asset :- asset which can't physicaly massured and touch e.i. Trade mark Goodwill 2)Current Asset :- Aseet which can be eassily converted in cash e.i. cash in hand, cash at bank, stock 3)Fictitious assets: its not the actual assets , its the expenditure occurred at the tine of commencement of firm ( capital expenditure )like preliminary expenses, discount on issue on debenture/shares, underwriting commission etc
In account, there two types of assets. 1. fixed asset 2. current assets. fixed assets includs long term assets like bulding, furnture,vehicle etc.& current assets is short term asset. It is include routine cash,stock,debtors,etc.
Assets: A resource with economic value control and own by individual,corporation and country with this expectation it will gave benefits in future. Assets can be divided into: 1 Current 2 liquid 3 Business 4 Natural 5 Marquee 6 Contingent 7 Active 8 Differed 9 Floating 10 Fictitious 11 Obsolete 12 Alternative 13 Tangible 14 Intangible 15 Exocet 16 Core
What the company owns like property, cash, inventory, etc are called as Assets.
Assets are classified into three categories. Current Assets Long-term operating assets Other Assets
Current Assets:- This includes cash and any asset that can easily be converted to cash within a very short period of time, typically within a year. Current assets are also called "working assets".
Cash and Short-Term Investments: - Actual cash that the company has and short-term investments like short-term CDs, three-monthT-Bills, or other highly liquid assets.
Total Receivables, Net: - Usually, when a company sells its products, it doesn't receive the payment immediately, but in about thirty days. This creates a lag in cash inflow and the amount of this lag is called "Accounts Receivable". Once we account for bad debt from defaulting customers, we get Net Receivables.
Total Inventory: - In order to effectively sell its products, a company needs to maintain a stock of these products on hand. This is called inventory. An important point about inventory.... it's reported at how much it cost to build the product and not the value it would be sold for to the customer.
Prepaid Expenses: - If there are any goods or services that a company has already paid for but hasn't received, it's accounted as a prepaid expense. Insurance premiums paid in advance are an example.
Other Current Assets, Total:-These are any other non-cash assets that are due within a year but are not yet in possession of the company.
Total Current Assets: Sum of all the line items above gives the total current assets. This is an indication of whether a company can meet its short-term debt.
Long-term Operating Assets: These are assets used in the operations of the business and are not held for sale to customers. They fall into two categories ? tangible and intangible assets.
Property/Plant/Equipment, Total ? Net: - This includes the original cost paid for land, buildings & structures, machinery & equipment, etc. less accumulated depreciation. Every year since their purchase, these items lose value due to use. Depreciation is a charge taken to account for this. Accumulated depreciation is the sum of this charge over the useful lifespan of these assets.
Goodwill, Net: - When a company acquires other companies, it usually pays more than the book value of those companies. This excess is called goodwill. Why pay goodwill? The companies being acquired might have a strong brand, or a list of dedicated customers, or may own a desirable patent or secret product formulation. The price for these intangibles is accounted as goodwill.
Intangibles, Net: - Intangibles are assets you can't touch ? patents, copyrights, trademarks, brand names, etc.
Long-Term Investments: - This represents the company?s investments in stocks, bonds, real estate, etc. It's important to note here that the investments are shown at their cost or market price, whichever is lower. So if the company has done really well with it's investments, the appreciation in value is hidden.
Other Long-Term Assets:-Any long-term investments that could not specifically be included in any of the line items above get lumped into other long-term assets.
Other Assets, Total:-This is a catch-all for assets that do not fall under any of the line items above.
Asset: An asset is a resource or property having a monetary/economic value possessed by an individual or entity, which is capable of producing some future economic benefit.
Types of Assets:
1. Convertibility: One way of classification of assets is based on their easy convertibility into cash.
According to this classification, total assets are classified either into Current Assets or Fixed Assets.
? Current/Liquid Assets: Assets which are easily convertible into cash like stock, inventory, marketable securities, short term investments, fixed deposits, accrued incomes, bank balances, debtors, prepaid expenses etc. are classified into current assets. Current assets are generally of a shorter life span.
? Fixed/Non-Current/Hard Assets: Fixed assets are of a fixed nature in the context that they are not readily convertible into cash. They require elaborate procedure and time for their sale and converted into cash.examples are Land, building, plant, machinery, equipment and furniture. Generally the value of fixed assets generally reduces over a period of time (known as depreciation).
2. Physical Existence: Another classification of assets is based on their physical existence.
According to this classification, an asset is either a tangible asset or intangible asset.
? Tangible Assets: Tangible assets are those assets which we can touch, see and feel. All fixed assets are tangible. Moreover, some current assets like inventory and cash fall under the category of tangible assets too.
? Intangible Assets: Intangible assets cannot be seen, felt or touched physically by us. Some examples of intangible assets are goodwill, franchise agreements, patents, copyrights, brands, trademarks etc.
3. Usage: According to a third way of classification, assets are either operating or non-operating. This classification is based on usage of the asset for business operation.
? Operating Assets: All assets required for current day-to-day transaction of business are known as operating assets. In simple words, the assets that a company uses for producing a product or service are operating assets. These include cash, bank balance, inventory, plant, equipment etc.
? Non-operating Assets: All assets which are of no use for daily business operations but are essential for the establishment of business and for its future needs are termed as non-operational. This could include some real estate purchased to earn from its appreciation or excess cash in business, which is not used in operation.