Shopping on line can be easy, simple and save you lots of money. It can also take a lot of your time, frustrate you, and result in unwanted purchases. Now the same can be said for regular high street shopping, but with the vast opportunity presented by the Internet it will pay you to spend a few minutes reading this and understanding how to better optimize your Asset shopping experience:
1. Compare - without doubt the biggest advantage that the Asset offers shoppers today is the ability to compare thousands of Asset at a time. This is a great thing, but not necessarily all the time! Too much can be daunting at times so take advantage of the great comparison sites and where possible let them do the hard work for you.
2. Research - if it has been said it will be on the internet. Ignorance is no longer a justifiable reason for buying the wrong thing. Take the time to research in detail everything that you could possible want to know about
3. Testimonials - don't know anybody that has bought a Asset? Wrong! If the Asset is good the internet will let you know. Use the Internet as a friend and get testimonials before you buy.
4. Questions - Got a question about Asset then search the Forums, FAQ's, Blogs etc. Don't be afraid to ask .....
5. Reputation - Never heard of the company selling Asset? Don't worry, no reason why you should know every company in the world, but you know someone that does! Use the internet to find out what people are saying about Asset and build up a picture of their reputation for sales, returns, customer service, delivery etc.
6. Returns - still worried that even after all of the above your Asset wont be what you want? Check out the returns policy. There is so much competition now that someone, somewhere is bound to offer the terms that you are comfortable with.
7. Feedback - happy with your Asset then let people know, after all you are depending on others people input in your buying decision, so why not give a little back.
8. Security - check for the yellow padlock on the Asset site before you buy, and the s after http:/ /i.e. https:// = a secure site
9. Contact - got a question about Asset, or want to leave a comment then check out the sites contact page. Reputable companies have them and respond.
10. Payment - ready to pay for your Asset, then use your credit card or PayPal! Be aware of companies that don't accept them, there may be genuine reasons but given the huge amount of choice you have when buying online there is no reason at all not to buy via credit card or PayPal.
In business and
accounting by
asset is meant probable future economic benefits controlled by an entity as a result of
past transactions or events and from which future economic benefits may be obtained.
Asset characteristics
Assets have three essential characteristics:
- They embody a future benefit that involves a capacity, singly or in combination with other assets, in the case of profit oriented enterprises, to contribute directly or indirectly to future net cash flows, and, in the case of Non-profit organization, to provide services;
- The entity can control access to the benefit; and,
- The transaction or event giving rise to the entity's right to, or control of, the benefit has already occurred.
It is not necessary, in the financial accounting sense of the term, for control of access to the benefit to be legally enforceable for a resource to be an asset, provided the entity can control its use by other means.
It is important to understand that in an accounting sense an asset is not the same as ownership. In accounting, ownership is described by the term "equity," (see the related term shareholders' equity). Assets are equal to "equity" plus "liabilities."
The
accounting equation relates assets, liabilities, and ownership equity:
Assets = Liabilities + Owners' Equity,
The accounting equation is the mathematical structure of the
balance sheet.
Assets are usually listed on the balance sheet. It has a
normal balance, or usual balance, of
debit (i.e., asset account amounts appear on the left side of a ledger).
Similarly, in
economics an asset is any form in which
wealth can be held.
Probably the most accepted accounting definition of
asset is the one used by the International Accounting Standards Board The International Accounting Standards Board, IASB. The following is a quotation from the IFRS Framework: "An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise." IFRS
Assets are formally controlled and managed within larger organizations via the use of asset tracking tools. These monitor the purchasing, upgrading, servicing, licensing, disposal etc., of both physical and non-physical assets.
Classification of assets
Assets may be classified in many ways. In a company's balance sheet certain divisions are required by generally accepted accounting principles (GAAP), which vary from country to country.
Current assets are cash and other assets expected to be converted to cash, sold, or consumed either in a year or in the operating cycle. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets:
Cash — it is the most Market liquidity, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, cheque, bank drafts).
Short-term investments — include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities).
Receivables — usually reported as net of allowance for uncollectible accounts.
Inventory — trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the "lower of cost or market" rule.
Prepaid expenses — these are expenses paid in cash and recorded as assets before they are used or consumed (a common example is insurance). See also adjusting entries.
The phrase
net current assets (also called
working capital) is often used and refers to the total of current assets less the total of current liability.
Long-term investments
Often referred to simply as "investments." Long-term investments are to be held for many years and are not intended to be disposed in the near future. This group usually consists of four types of investments:
Investments in securities, such as bonds, common stock, or long-term notes.
Investments in fixed assets not used in operations (e.g., land held for sale).
Investments in special funds (e.g., sinking funds or pension funds).
Investments in subsidiary or affiliated companies.
Different forms of
insurance may also be treated as long term investments.
Fixed assets
Also referred to as PPE (property, plant, and equipment), or tangible assets, these are purchased for continued and long-term use in earning
profit in a business. This group includes
Land (economics),
buildings, machinery, furniture, tools, and certain wasting resources e.g., timberland and minerals. They are written off against profits over their anticipated life by charging
depreciation expenses (with exception of land). Accumulated depreciation is shown in the face of the balance sheet or in the notes.
These are also called capital assets in
management accounting.
Intangible assets
Intangible assets lack physical substance and usually are very hard to evaluate. They include patents, copyrights, franchisings,
goodwill, trademarks, trade names, etc. These assets are (according to US GAAP) amortized to expense over 5 to 40 years with the exception of goodwill.
Some assets such as websites are treated differently in different countries and may fall under either tangible or intangible assets.
Other assets
This section includes a high variety of assets, most commonly:
- long-term prepaid expenses
- long-term receivables
- intangible assets (if they represent just a very small fraction of total assets)
- property held for sale.
In a lot of cases this section is too general and broad, because assets could be classified into four above categories.
References
See also
External links
- Protecting Business Assets: An article from Oklahoma State University
- Roundtable on accounting for intangible assets
In
business and
accounting by
asset is meant probable future economic benefits controlled by an entity as a result of
past transactions or events and from which future economic benefits may be obtained.
Asset characteristics
Assets have three essential characteristics:
- They embody a future benefit that involves a capacity, singly or in combination with other assets, in the case of profit oriented enterprises, to contribute directly or indirectly to future net cash flows, and, in the case of Non-profit organization, to provide services;
- The entity can control access to the benefit; and,
- The transaction or event giving rise to the entity's right to, or control of, the benefit has already occurred.
It is not necessary, in the financial accounting sense of the term, for control of access to the benefit to be legally enforceable for a resource to be an asset, provided the entity can control its use by other means.
It is important to understand that in an accounting sense an asset is not the same as ownership. In accounting, ownership is described by the term "equity," (see the related term
shareholders' equity). Assets are equal to "equity" plus "
liabilities."
The
accounting equation relates assets, liabilities, and
ownership equity:
Assets = Liabilities + Owners' Equity,
The accounting equation is the mathematical structure of the
balance sheet.
Assets are usually listed on the balance sheet. It has a normal balance, or usual balance, of
debit (i.e., asset account amounts appear on the left side of a ledger).
Similarly, in
economics an asset is any form in which wealth can be held.
Probably the most accepted accounting definition of
asset is the one used by the
International Accounting Standards Board The International Accounting Standards Board, IASB. The following is a quotation from the IFRS Framework: "An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise." IFRS
Assets are formally controlled and managed within larger organizations via the use of asset tracking tools. These monitor the purchasing, upgrading, servicing, licensing, disposal etc., of both physical and non-physical assets.
Classification of assets
Assets may be classified in many ways. In a company's
balance sheet certain divisions are required by generally accepted accounting principles (GAAP), which vary from country to country.
Current assets are cash and other assets expected to be converted to cash, sold, or consumed either in a year or in the operating cycle. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets:
Cash — it is the most Market liquidity, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, cheque, bank drafts).
Short-term investments — include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities).
Receivables — usually reported as net of allowance for uncollectible accounts.
Inventory — trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the "lower of cost or market" rule.
Prepaid expenses — these are expenses paid in cash and recorded as assets before they are used or consumed (a common example is insurance). See also adjusting entries.
The phrase
net current assets (also called
working capital) is often used and refers to the total of current assets less the total of current
liability.
Long-term investments
Often referred to simply as "investments." Long-term investments are to be held for many years and are not intended to be disposed in the near future. This group usually consists of four types of investments:
Investments in securities, such as bonds, common stock, or long-term notes.
Investments in fixed assets not used in operations (e.g., land held for sale).
Investments in special funds (e.g., sinking funds or pension funds).
Investments in subsidiary or affiliated companies.
Different forms of
insurance may also be treated as long term investments.
Fixed assets
Also referred to as PPE (property, plant, and equipment), or tangible assets, these are purchased for continued and long-term use in earning
profit in a business. This group includes
Land (economics),
buildings, machinery, furniture, tools, and certain wasting resources e.g., timberland and minerals. They are written off against profits over their anticipated life by charging depreciation expenses (with exception of land). Accumulated depreciation is shown in the face of the balance sheet or in the notes.
These are also called capital assets in
management accounting.
Intangible assets
Intangible assets lack physical substance and usually are very hard to evaluate. They include
patents, copyrights, franchisings,
goodwill,
trademarks, trade names, etc. These assets are (according to US GAAP) amortized to expense over 5 to 40 years with the exception of goodwill.
Some assets such as websites are treated differently in different countries and may fall under either tangible or intangible assets.
Other assets
This section includes a high variety of assets, most commonly:
- long-term prepaid expenses
- long-term receivables
- intangible assets (if they represent just a very small fraction of total assets)
- property held for sale.
In a lot of cases this section is too general and broad, because assets could be classified into four above categories.
References
See also
External links
- Protecting Business Assets: An article from Oklahoma State University
- Roundtable on accounting for intangible assets
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