Balance Sheet classifications

Current Asset

Assets which are reasonably expected to be realized in cash or consumed during an operating cycle

Operating cycle

Average time between acquiring materials to receiving cash for it. If operating cycle is >1 year, it is used. If it is <1 year, 1 year is used

Cash

Current asset; pays obligations

Cash equivalents

Current asset; short-term (3-months), high liquid investments; often combined with cash

Restricted cash

Current asset; restricted cash for a particular liability

Short-term investments

current asset; investments that company intends to sell within a year

Accounts receivable

Current asset; consideration that entity is entitled to for providing goods or services; presented net of allowance for doubtful accounts

Nonetrade receivables

Current asset; amounts owed to company for non-customer transactions within a year (tax refunds, advances to employees, advances to others)

Notes receivable

current asset; receivables w/ a maturity date within the year, supported by formal contractual agreements

Inventory

Current asset; goods held for use in manufacture of product or products waiting for sale

3 categories of inventories for manufactures

Raw materials, work-in-process, finished goods

Prepaid Expenses

Current Asset; payments made in advance of receipt of services like insurance

Non-current assets

Assets which are not expected to be converted into cash within the operating cycle

Noncurrent investments

Noncurrent asset; investment in equity not classified as current; funds set aside for noncurrent future use

Property, plant, and equipment (PPE)

Noncurrent asset; Tangible and other assets used in continuing operations not held for resale

PPE examples

Buildings, machinery, leasehold improvements (net of accumulated depreciation); mineral deposits, timberland, agricultural land (net of depletion)

Lease assets (right of use assets)

Noncurrent asset; assets recognized for leases w/ terms >12months

Intangible assets & good will

noncurrent assets; assets used in production or held for investment that lack physical substance; subject to amortization

Goodwill

noncurrent asset; arises when company acquires another one and the purchase price exceeds fair value

Other assets

Noncurrent assets; not easily included under alternative asset classifications

Other assets examples

noncurrent prepaid expenses (deferred charges), idle fixed assets, deferred tax assets, long-term receivables, noncurrent assets held for resale

Current Liability

Obligations expected to be liquidated within the operating cycle. Accounts payable or notes payable (short-term) are listed first

Accounts Payable

Current liability; obligations related to acquisition of inventories, supplies, and services used in production and sale of goods and services

Short-term notes payable

Current liability; formal, written promises to pay an amount in the future

Current maturities of long-term debt and lease liabilites

Current liability; portion of long-term debt due within the next year; portion of a lease liability due within the year

Callable obligations

Current liability; obligations due on demand under the contract provision in effect at the balance sheet date

Deferred revenue

Current liability; cash received in exchange for a company’s obligation to transfer goods or service in the future

Accrued liability

Current liability; incurred but unpaid expenses for items

Accrued liability examples

Salaries, payroll taxes, interest, taxes and utilities

Noncurrent liability

An obligation does not require the use of current assets or will be settled within a year

Noncurrent debt

Noncurrent liability; obligations to pay amounts due after a year

Noncurrent debt examples

Bonds payable, long-term notes payable

Lease liabilities

Noncurrent liability; obligations to make lease payments due after 1 year; measured at present value

Other noncurrent liabilities

noncurrent liability; obligations like pension liability, deferred tax liability

Stockholders’ equity

classified w/ common stock listed first & equity accounts after

Paid-in capital (contributed capital)

Common stock, preferred stock, paid-in capital in excess of par

Retained Earnings

= accumulated net earnings - dividends declare

Accumulated other comprehensive income

accumulated revenues, expenses, gains, and losses included in comprehensive income but not in net income

Treasury stock

Capital stock that has been issued and then reacquired; amount shown as a deduction

Noncontrolling interests

Amounts of a company’s net assets owned by outside investors

Work Capital

= current asset - current liability