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An Asset can be defined as follows:

An item of economic value owned by an individual or corporation, especially that which could be converted to cash.

Current assets are cash and other assets expected to be converted to cash, sold, or consumed either in a year or in the operating cycle.

Current Assets:

1. Cash – a liquid asset which includes currency, deposit accounts and negotiable instruments e.g. cheques, money orders and bank drafts.

2. Short-term investments - includes securities which have been purchased and are held for short term future sale to generate income - trading securities.

3. Receivables - net of expected uncollectible accounts.

4. Inventory - the inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower.

5. Prepaid expenses - these are expenses paid in cash and recorded as assets before they are used or consumed (a common example is rent or insurance).

Long-Term Investment Assets

Long-Term Investments are often referred to as “investments.” These type of investments are purchased and held for a long period of time without the intent for quick disposal. This type of asset usually consists of four types of investments:

1. Investment in securities such as bonds, common stock, or long-term notes.

2. Investment in fixed assets not used in operations - an example of this is land held for sale.

3. Investment in special funds (e.g. sinking funds or pension funds).

4. Investment in subsidiaries or affiliated companies.

It should be noted that some forms of insurance may also be treated as a long term investment.

Fixed Assets

Fixed Assets can be referred to as PPE (property, plant, and equipment) or tangible assets. These assets are purchased for continued and long-term use within the business and can include land, buildings, machinery, furniture, tools, etc. These items are written off against profits over their anticipated life by charging depreciation expenses (with exception of land). These are also called capital assets in management accounting.

Intangible Assets

Intangible assets lack physical substance and are usually extremely difficult to evaluate. They can include intellectual property, patents, copyrights, franchises, goodwill, trademarks, trade names, etc.

How to use your ‘ASSETS’ to facilitate business growth?

Asset lending providers such as Gold Coast based company, Asset Loan Co can offer a simple and easy solution to the funding needs of businesses as an alternative to traditional banking options. Businesses can capitalise on growth if they can appropriately finance and use their assets and resources as the key. This type of finance solution can be the vehicle to drive dynamic business operations and be the key to business success.

Whilst access to working capital through inventory finance has not been readily available in Australia, many International businesses have long benefited from this type of lending. This has all changed now with one of Australia’s leading lending companies, Asset Loan Co introducing this type of financing.

CEO, Paul Hare said that “In the business market today, many businesses face obstacles and challenges that are unique. They often find that their own success is causing cashflow obstacles, and they then become a victim of their own success. Unfortunately, once they achieve optimum market penetration, and orders are self generating, they discover an even greater demand for capital and cashflow, and this is where substantial financial pressure gets placed on the business.”

Businesses can have their assets working for them rather than finding themselves caught up in a cashflow crisis. Despite businesses currently operating in quite a buoyant business climate, a lack of working capital can restrict growth and subsequently “success”. By using existing assets to fund cashflow, it is now possible to better manage a business and cash up to provide the freedom to facilitate growth.

Lenders such as Asset Loan Co have become a lifeline to some businesses and are increasingly focusing on helping companies to provide working cashflow to arm them with the freedom to grow their businesses in quite buoyant fiscal conditions.

Paul Hare
http://www.articlesbase.com/finance-articles/all-about-assets-101781.html

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