Assets
Assets are the first of three major categories on the balance sheet.Current assets represent the value of all assets that can reasonably expect to be converted into cash within one year and are used to fund ongoing operations and pay current expenses. Some examples of current assets include
- Cash and cash equivalents
- Account receivable
- Prepaid expenses
- Inventory
- Marketable securities
Non-current assets are a company’s long -term investments,or any asset not classified as current. Both fixed assets, like plant and equipment, and intangible assets, like trademarks fall under non-current assets. Some examples of non-current assets are:
- Land
- Property, plant, and equipment
- Trademarks
- Long-term investments and even goodwill
Assets are things a firm owns or what a firm can claim from others. In case of a bank, apart from buildings, furniture, etc., its assets are loans given to public. When the bank gives out loan of Rs 100 to a person, this is the bank’s claim on that person for Rs 100. Another asset that a bank has is reserves. Reserves are deposits which commercial banks keep with the Central bank, Reserve Bank of India (RBI) and its cash. These reserves are kept partly as cash and partly in the form of financial instruments (bonds and treasury bills) issued by the RBI. Reserves are similar to deposits we keep with banks. We keep deposits and these deposits are our assets, they can be withdrawn by us. Similarly, commercial banks like State Bank of India (SBI) keep their deposits with RBI and these are called Reserves.
Assets = Reserves + Loans