RECENT NEWS  5 hrs ago  Comment 
GEIGER COUNTER LIMITED Date of 26/10/2016 Announcement: Net Asset Values per share as 25/10/2016 at: The unaudited net asset value (NAV) of the company is noted below in pence per share.       ...
Financial Times  Oct 25  Comment 
Private equity group’s holdings hit record high as deals and IPOs tail off  Oct 25  Comment 
GEIGER COUNTER LIMITED Date of 25/10/2016 Announcement: Net Asset Values per share as 24/10/2016 at: The unaudited net asset value (NAV) of the company is noted below in pence per share.       ...
The Economic Times  Oct 25  Comment 
Provisions and contingencies for the quarter stood at Rs 749 crore consisting of specific loan provisions of Rs 640.7 crore and general provisions of Rs 108 crore.  Oct 24  Comment 
GEIGER COUNTER LIMITED Date of 24/10/2016 Announcement: Net Asset Values per share as 21/10/2016 at: The unaudited net asset value (NAV) of the company is noted below in pence per share.       ...
The Australian  Oct 24  Comment 
Santos has sold its remaining Victorian gas assets in an $82 million deal with fellow ­Adelaide company Cooper ­Energy.  Oct 21  Comment 
GEIGER COUNTER LIMITED Date of 21/10/2016 Announcement: Net Asset Values per share as 20/10/2016 at: The unaudited net asset value (NAV) of the company is noted below in pence per share.       ...
Banking Business Review  Oct 21  Comment 
Financial innovation company R3 and twelve of its consortium member banks have trialed Ripple’s distributed financial technology and the potential for its digital asset to scale liquidity and reduce the costs and inefficiencies of interbank...


An asset is an accounting term; anything of value owned by a company or individual is an asset. Financial assets include cash, stocks, and bonds; fixed assets such as buildings, machinery and equipment, or even intangible assets such as goodwill or a company's reputation among customers.

Publicly-traded companies are required to list a summary of their assets and liabilities every quarter on their balance sheet, where accounting rules determine how assets are categorized and valued.

The opposite of an asset is a liability - something of negative value, usually a debt owed by a company.

Types of Assets

From an accounting perspective, assets are divided into two broad categories:

Current assets

Current assets are assets which the company expects to sell, use-up, or otherwise convert to cash in the next year. Current assets include:

  • Cash
  • Inventory: Includes inventory of raw materials and finished goods
  • Short-term investments that can be converted to cash quickly, such as T-bills held by the company
  • Receivables (money owed to a company, usually as payment or goods or services)
  • Office Supplies

Net current assets or Working capital, calculated by subtracting current liabilites from current assets, is a measure of the assets the company has at its disposal in the short term to fund operations - other kinds of assets such as equipment, real estate and goodwill are less easily converted to cash.

By the principle of prudence, current assets are reported in the balance sheet at their least favorable valuation. Short-term investments, for example, will be recorded at the value that the firm paid for it or the market value, whichever is lower. It is only after selling the position that the company recognizes any gains. Similarly, inventory of raw materials is valued at the lower of cost of purchase and market price; and inventory of finished goods are recorded at the lower of cost of production and selling price.

Long-term assets

Long-term assets are assets that cannot be converted to cash easily and hence are not used to fund everyday operations. Examples include: company cars, computers and investment in another company. Long-term assets are of three types:

Fixed assets

Fixed assets, also known as property, plant & equipment (PP&E), are used to produce the goods or services of the company and cannot easily be converted to cash. Fixed assets include equipment such as production machinery, computers, and motor vehicles, as well as land and buildings. These assets are referred to as "fixed" since they remain unchanged in the course of production -- unlike cash, which is used to buy raw materials, which in turn is used to produce finished products. Normally, fixed assets are subject to depreciation and/or amortization.

Often, fixed assets are tailored to be production specific and have little resale value. Oil rigs, for example, are built on site and are not reused after the oil well is depleted. They can be sold as scrap metal, but it is highly unlikely that a company can resell these rigs for the value of new rigs. However, companies record the value of these assets on their balance sheets at the purchase price (including the cost of installation) rather than at resale value. Similarly, computers decrease in value quickly and can only be resold at a fraction of their original purchase price.

On the other hand, land and buildings can increase or decrease in value depending on local real-estate conditions, but, in most cases, the principle of prudence only allows devaluation to be recognized in the balance sheet.

Fixed assets are treated as investments (instead of expenses) by companies and are depreciated over the course of their useful life.

Long-term investments

Any investment which has a horizon of one year or more is considered a long-term investment. Long-term investments are investments made by a company in order to secure an additional income stream or a strategic goal. Such investments can range from anything from buying a minority stake at another company to long-run hedges against oil prices. Berkshire Hathaway 's investment in Coca-Cola and Southwest Airlines' hedge against high oil prices are good examples of long-term investments.

In this case too, the company needs to exercise prudence in reporting the value of the investment. The investments are reported at the lower of purchase price or market value. Any gains from these investments are only recorded after the sale of the position. These gains are subject to capital gains taxes rather than income taxes.

Intangible assets

Intangible assets are assets which cannot be physically seen. Capitalized research expenses, goodwill, trademarks, copyrights, patents, brand recognition are all intangibles. Even though intangibles are not present physically, they are often more valuable than fixed assets. For example, Coca-cola and Apple would not be as valuable without their brands.

However, not all intangible assets appear on the balance sheet. In fact, in most cases, GAAP does not allow internally generated intangibles to show up on the balance sheet. On the other hand, if a company pays more than the book value to acquire another company, the difference would show up as goodwill in the acquirer's balance sheet. Also, research-based companies, such as drug-manufacturers, often capitalize their research and development expenses -- since, in theory, research can provides value long after it has been completed.

Generally, intangibles are amortized on a straight-line basis over their useful life (e.g. franchising agreement would be amortized over the life of the franchising contract). Amortization provides the companies with tax benefits since it is considered to be an expense (and thus reduces taxable income). However FASB rule 142 allows US companies to keep intangibles with indefinite life on their balance sheet.[1]


  1. FASB Rule 142, Retrieved September 18, 2008
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki