Average assets, as the name suggests, is the average amount of assets held during a period. For practical purposes, it is calculated by taking the sum of assets at the beginning of a period and assets at the end of the period and then dividing the sum by 2.
- Average Assets = (Asset in the beginning + Assets in the end)/2
Example
Company A had $100 million in Assets on 31st December 2007, and $200 million in Assets on 31st December 2008. Its Average Assets for the year were $150 million ((100+200)/2).