Types of Assets
Basically, assets are classified into two categories, current assets and non-current assets. The following is an explanation of each type of asset:
1. Current Assets
Current assets are the most liquid type of asset. That is, the assets are the fastest and easiest to convert into cash. Current assets have short cycles or turnover and benefits. Generally, the current assets turnover period is 1 year or within one company norm cycle. Because of its fast turnaround, the benefits of current assets also run out quickly, but after they run out they will be replaced with other assets or assets. The situation continued until the end of the period. Examples of current assets such as cash, trade receivables, notes receivable, inventories, equipment, short-term investments, prepaid expenses and income to be received.
2. Non-current Assets
Non-current assets are assets that have a cycle and useful life of more than one year. Non-current assets are divided into 3 parts viz.
a. Fixed assets
Fixed assets or tangible assets are assets that have a physical form or form. Fixed assets are utilized and used by companies for the activities of producing goods or services. So that the purpose of having fixed assets is not to be resold but used in company operations. Assets can still be sold by the company if the useful life of the assets is used up, damaged, or due to other problems. Examples of assets included in fixed assets are land, buildings, buildings, machinery, vehicles, and others.
b. Intangible Assets
Apart from fixed assets, intangible assets are also classified as non-current assets. Intangible assets are assets that are not visible / or are not physically visible but have value and benefit to the company. Examples of intangible assets are goodwill, patents, copyrights, building rights, lease rights, and so on.
c. Long term investment
Investment is an asset that is enabled for the purpose of getting wealth growth. Long-term investment in question includes all long-term investments made by the company both in the past or present. For example: Maju Jaya company invests in Sejahtera Bersama company, then Maju Jaya company must record the assets in the form of investment in its balance sheet.
The above is an explanation of assets and types. Assets are an important part of companies and individuals. Assets can be used as a benchmark for company performance. Asset management within the company is also important for the company’s performance to progress and achieve goals.
After learning a few important things about assets, you must start managing the company’s assets properly. A journal with Asset Management features can help you manage company assets more easily. Where, you can calculate the depreciation value automatically and can create an asset report accurately and quickly. For complete information about this feature and other features, please check here….