FABM 1: Assets

Current Assets

1. Cash

2. Cash Equivalents

3. Marketable Securities

4. Trade and other receivables

5. Inventories

6. Prepaid Expenses

7. Contra-asset Accounts

Cash

includes coins, currencies, checks, bank deposits, and other cash items readily available for use in the operations of the business.

Cash Equivalents

are short-term investments that are readily convertible to known amounts of cash which are subject to an insignificant risk to changes in value (per SFAS No. 22, revised 2000).

Marketable Securities

are stocks and bonds purchased by the enterprise and are to be held for only a short span of time or duration. They are usually purchased when a business has excess cash.

Trades and other receivables

• accounts receivable

• notes receivable

• interest receivable

• advances to employees

• accrued income

accounts receivable

amount collectible from the customer to whom sales have been made or services have been rendered on account or credit

notes receivable

promissory note issued by the client or the customer in exchange for services or goods received as evidence of his/her obligation to pay

interest receivable

amount of interest collectible on promissory notes received from customers and clients

advances to employees

certain amount of money loaned to employees payable in cash or through salary deductions

accrued income

income already earned but not yet received

Inventories

represent the unsold goods at the end of the accounting period. This is applicable only to a merchandising business.

Prepaid Expenses

include supplies bought for use in the business or services and benefits to be received by the business in the future paid in advance.

Contra-asset accounts

accounts deducted from the related asset accounts

Allowance for bad debts

losses due to uncollectible accounts. This is deducted from the accounts receivable account to get the net realizable value. This is in line with the financial statements' qualitative characteristic of conservatism wherein no profits would be anticipated but all probable or estimable losses should be provided.

Accumulated depreciation

represents the expired cost of property, plant, and equipment as a result of usage and passage of time. This is deducted from the cost of the related asset account to get the carrying value or book value of the asset.

Non-current Assets

1. Long term investment

2. Property, plant, and equipment

3. Intangible assets

Long term investments

are assets held by an enterprise for the accretion of wealth through capital distribution such as interests, royalties, dividends and rentals, for capital appreciation or for other benefits to the investing enterprise such as those obtained through trading relationships. Investments are classified as long-term when they are intended to be held for an extended period of time (International Accounting Standards No. 25).

Property, plant, and equipment

are tangible assets that are held by an enterprise for use in the production or supply of goods or services, or for administrative purposes. These assets are expected to be used for more than one period (International Accounting Standards No. 16).

land

a piece of lot or real estate owned by the enterprise on which a building be constructed for business purposes.

building

edifice or structure used to accommodate the office, store, or facton a business enterprise in the conduct of its operations.

equipment

includes typewriter, air-conditioner, calculator, filing cabinet, computer, electric fan, trucks, and cars used by the business in its office. factory. Specific account titles may be used such as office equipment, store equipme delivery equipment, transportation equipment, and machinery equipment.

furniture and fixtures

include tables, chairs, carpets, curtains, lamp and lighting fixtures, and wall decors. Specific account titles may be used such as office furnitu and fixtures, and store furniture and fixtures.

Intangible assets

identifiable, non-monetary assets without physical substance held for use in the production or supply of goods or services, for rental to others or for administrative purposes. These include goodwill, patents, copyrights, licenses franchises, trademarks, brand names, secret processes, subscription lists, and m competition agreements (International Accounting Standards No. 38).