- Cash – in the bank now
- Accounts Receivable – money owed TO the organization
- Investments – savings, inventory, raw materials
- Fixed Assets – tangible property or equipment used in operations
- Other Assets – prepaid expenses
Assets can be further defined as either short term/current or long term/non-current. Short-Term assets can be easily converted into cash or are typically used within twelve months. Long-Term (non-current) assets have a “life” of longer than one year, either by use or conversion into cash.
Fixed assets are tangible items with a use of longer than one year. As the fixed assets are used, their value decreases. Depreciation is the calculation recorded to lower the holding value of the fixed assets. When an asset is sold, the amount received may not be equal to what is recorded in the books. Depreciation is an estimated calculation. Generally accepted tables and guidelines are available to help with these calculations.
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