Non-Current Assets
• Cash and claims to cash that are restricted as to withdrawal or use for other than current opera tions, are designated for the acquisition or construction of non-current assets, or are segregated for the liquidation of long-term debts. The restricted cash should be reported on a separate line in the investments or other assets section as non-current assets.
• Marketable securities, including stocks, bonds, and long-term notes receivable that do not repre sent the investment of cash available for current operations. Even though a security may be readily marketable, if management does not intend to convert it to cash within one year or the company's operating cycle, whichever is longer, it should be classified as a non-current asset. An available for-sale debt security with a maturity date that would otherwise cause it to be classified as a current asset should also be classified as a non-current asset if management does not consider it to be available for current operations. A held-to-maturity debt security is normally classified as a non- current asset until its maturity date is within one year or the length of the firm's operating cycle, whichever is longer.
• Long-term investments or advances, whether marketable or not, made for the purpose of obtaining Control, for affiliation, or other continuing business advantage.
• Property, plant, and equipment.
• Right-of-use assets obtained under lease agreements.
Note: The FASB has not specified whether right-of-use assets obtained under lease agreements are to be considered tangible or intangible assets.Intangible long-term assets.
• Other long-term assets such as long-term prepaid expenses, prepaid pension cost, and receivables arising from unusual transactions not expected to be collected within twelve months.
• Contract assets under ASC 606 that are not expected to be converted to cash within one year or the operating cycle, whichever is longer.
• Net deferred tax assets.
• The cash surrender value of life insurance policies on the lives of key employees.
• Other non-current assets not included in other categories, such as non-current receivables, long- term prepayments, and restricted cash or securities or assets in special funds.
Property, Plant, and Equipment (Fixed Assets)
Property, plant, and equipment (PP&E) are tangible assets used in operations that will continue to be used beyond the end of the current period. When the fixed assets are purchased, they are recorded at their cost, including shipping-in and installation costs needed to bring the asset to usable condition. The cost is then expensed over the life of the asset through depreciation, amortization, or depletion (except for land, which is not depreciated).
Examples of property, plant, and equipment include:
• Land, buildings, machinery, furniture, equipment, and vehicles
• Leasehold improvements, or improvements made to leased property at the lessee's expense
• Assets obtained by means of a lease agreement
• Natural resources, such as gas, minerals, or timberland
natural resources other than land are depleted; property, plant, and equipment other than land are depreciated leasehold improvements are amortized land is not depreciated,amortized ,or depleted because land is not used up and does not wear out.
Read more :- Changing from the Equity Method to the Fair Value or Cost Less Impairment Method
Intangible Long-term Assets
Intangible assets do not have physical substance but they provide benefit to the firm over a period of time, Intangible assets may be either purchased substance but they provide benefit to, because an asset recorded balance sheet be either purchased or developed internally. intangible assets are not recorded on the balance sheet.⁸
Examples of intangible assets are copyrights, patents, goodwill, trademarks, and franchises. An Intangible asset with a limited life is amortized over its useful life intangible asset with an indefinite life, such asg Goodwill, is assessed periodically for impairment.
Current Liabilities
Current liabilities are obligations that will be settled through the use of current assets or by the creation of other current liabilities.
Examples of current liabilities include:
• Accounts payable and trade notes payable due to suppliers for purchase of goods and services.
• Dividends payable.
• Contract liabilities representing an entity's obligation under ASC 606, the revenue recognition standard, to transfer goods or services to a customer for which the entity has received consideration from the customer. Contract liabilities may be current liabilities or non-current liabilities or both, depending on the facts and circumstances such as when the entity expects to satisfy its performance obligations and how it satisfies its performance obligations-over time or at a point in time.
• Agency collections such as employee tax withholdings and sales taxes, where the company acts as agent for another party (the government) and is obligated to remit the payments.
• Obligations due on demand according to their terms, such as demand notes.
• Short-term (30-, 60-, 90 day) notes.
• Current portions of long-term debt and lease liabilities (the portions of the principal due within the operating cycle, usually twelve months).
• Taxes payable, wages payable, and other accruals.
• Long-term obligations callable at the balance sheet date due to some violation by the company such as a violation of a loan covenant⁹
• Assurance-type warranties ¹⁰for which the term of the warranty extends only into the next ac- counting period or the portion of a longer-term warranty that extends only into the next accounting period.