Monday, July 16, 2012

Assets


An asset of an entity is a present economic resource to which the entity has a right or other access that others do not have.
There are two types of assets:

1. Current assets
2. Non-current assets



Current assets are cash and other assets expected to be converted to cash or consumed either in a year or in the operating cycle (whichever is longer), without disturbing the normal operations of a business.
Examples:
  • Cash and cash equivalents
  • Short term investment
  • Receivables
  • Inventory
  • Prepaid expenses

Non-current assets are those which cannot be converted into cash within a year or in the operating cycle (Whichever is longer).
Examples:
  • Investment
  • Goodwill
  • Property, Plant & Equipment (PPE) 
 

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