Sunday, 13 July 2014


ASSET can be further divided into 2 parts:

    1. NON-CURRENT ASSET : Asset that can not be turned into money within one year
    2. CURRENT ASSET : Asset that can be turned into money within one year

Component of Non-Current Assets:

    1. PROPERTY, PLANT, AND EQUIPMENT(PPE) : Tangible asset that can be used to generate profit and last more than one years. Examples are building, equipment, machinery, furniture and land. 
    2. CONSTRUCTION IN PROGRESS : Buildings that are in the process of constructing.
    3. INVESTMENT PROPERTY : Property that are used to receive rental income or value appreciation and not used for production or administration purpose.
    4. INTANGIBLE ASSET : Asset without physical appearance. Examples are patent, license, trademarks.
    5. GOODWILL : When company acquired another firm, the different between buy price and the excess value of that firm(asset-liability) is goodwill.
    6. FINANCIAL ASSET :  Financial security that will not be sold within one year. Examples are bonds hold for maturity.
    7. DEFERRED TAX ASSET : Tax that had been paid more in the past or tax incentive that can be used  for tax reduction in futures.

Components of Current Assets:

    1. INVENTORY : Goods that will eventually be sold to customers. For  example: raw materials , work-in-progress and finished goods.
    2. TRADE AND OTHER RECEIVABLES : Money owed by customers to company.
    3. PREPAID EXPENSE : Expense that had been paid in advance but not been used.
    4. MARKETABLE SECURITY :  Financial security that can be changed into cash within one year. Examples are stocks, bonds, bank notes, treasury bills.
    5. CASH AND CASH EQUIVALENTS : Consists of cash and deposits in banks.

*Further Info

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