Reading the accounts
Assets
Everything a company owns or controls that is expected to produce future value.
How it works
Current assets are expected to convert to cash within a year — cash, receivables, inventory. Non-current assets are longer-lived: property, equipment, intangibles, goodwill.
Assets are recorded at historic cost less depreciation in most cases, not at current market value, so the balance sheet can understate or overstate real worth substantially.
Related terms
- Balance sheetA snapshot of what a company owns and owes at one moment in time.
- LiabilitiesEverything a company owes to someone else.
- Book valueWhat the balance sheet says shareholders own: total assets minus total liabilities.
- Intangible assetsNon-physical assets with value: patents, trademarks, software, licences and customer relationships.
- GoodwillThe premium paid over the fair value of a business’s identifiable assets when acquiring it.
More in Reading the accounts
- Audit opinion
- Adjusted earnings
- Accrual accounting
- Accounts receivable
- Breakeven
- Writedown
- Capital expenditure
- Working capital
All 51 Reading the accounts terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.