Dirkjan: Created page with "In a balance sheet an ''''Asset''''' is an item representing what a firm owns. In the context of accounting, assets are either current or Non-Current Ass..."

2020-08-25T08:10:26Z

Created page with "In a balance sheet an ''''Asset''''' is an item representing what a firm owns. In the context of accounting, assets are either current or Non-Current Ass..."

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In a balance sheet an ''''Asset''''' is an item representing what a firm owns.

In the context of accounting, assets are either [[Current Assets|current]] or [[Non-Current Assets|fixed]] (non-current). Current means that the asset will be consumed within one year. Generally, this includes things like cash, accounts receivable and inventory. Fixed assets are those that are expected to keep providing benefit for more than one year, such as equipment, buildings and real estate.

[[Current Assets|Current Assets]]
# [[Cash|Cash]] and cash equivalents
# [[Inventory|Inventory]]
# [[Accounts Receivable|Accounts Receivable]]
# Prepaid expenses for future services that will be used within a year

[[Non-Current Assets|Non-Current Assets]]
# Property, plant and equipment
# Investment property, such as real estate held for investment purposes
# [[Intangible assets|Intangible assets]]
# [[Financial assets|Financial assets]] (excluding investments accounted for using the equity method, accounts receivables, and cash and cash equivalents)
# Investments accounted for using the equity method
# Biological assets, which are living plants or animals. Bearer biological assets are plants or animals which bear agricultural produce for harvest, such as apple trees grown to produce apples and sheep raised to produce wool.[17]

The main formula behind balance sheets is:
<math> \text {Assets} = \text{Liabilities} + \text{Shareholders' Equity}</math>

This means that assets, or the means used to operate the company, are balanced by a company's financial obligations along with the equity investment brought into the company and its retained earnings.

[[Assets|Assets]] are what a company uses to operate its business, while its liabilities and [[Equity|equity]] are two sources that support these assets. Owners' equity, referred to as shareholders' equity in a publicly traded company, is the amount of money initially invested into the company plus any retained earnings, and it represents a source of funding for the business.
[[Category:mbi]]

[[Category:Balance Sheet]]

[[Category:Term]]

Assets - Revision history

Dirkjan: Created page with "In a balance sheet an ''''Asset''''' is an item representing what a firm owns. In the context of accounting, assets are either current or Non-Current Ass..."