Types of Assets
A current asset is an asset that a company holds and can be easily sold or consumed and further lead to the conversion of liquid cash. For a company, a current asset is an important factor as it gives them a space to use the money on a day-to-day basis and clear the current business expenses. In other words, the meaning of current assets can be explained as an asset that is expected to last only for a year or less is considered as current assets.
List of current assets
- Cash and cash equivalent
- Ongoing projects
- Pre-Paid expenses
- account receivable
Fixed Assets/Non-current Assets/Long Term Assets
Fixed assets are the long term tangible assets that are used by business in generating income. Fixed assets provide the firm with long term financial gain as they have a useful life of more than one year. Fixed assets are also known as capital assets and are denoted by the term Property, Plant and Equipment in the balance sheet. Fixed assets cannot be easily converted into cash.
List of Fixed Assets
- Land and Buildings
- Plant, Property and Equipment
Intangible assets are defined as a category of assets that do not possess a physical existence. In other words, intangible assets cannot be felt or touched. The intangible assets although devoid of any physical presence, work towards generating revenue for the business.
Intangible assets are regarded as long term assets that are useful for the business over a period of more than one accounting period. In other words, intangible assets generate revenue for the business across accounting periods.
Intangible assets can be created or can be acquired by the means of purchasing from a third party. Valuation of intangible assets is difficult and they also provide unpredictable future benefits.
Intangible assets are usually recorded at the cost of original purchase and are not adjusted over time. They appear on the balance sheet only if intangible assets are acquired.
Intangible assets cannot be destroyed by fire, natural calamities like flood, etc, but they can be destroyed under certain circumstances
List of intangible Assets
- Patient right