Classification of Asset

In a balance sheet the assets are classified as current assets, investments, property plant and equipment, intangible assets, and others.

Current Assets:

Current assets are the one that is expected to convert to cash within the current operating time period of the company. These include cash, temporary investments, and accounts receivable, inventory, receivables etc.

Investments:

Long term investments that are not going to be sold in near future are considered as an investment. These include investments in bonds, stocks, land that is not used by the company, pension funs, even some insurance are also considered as investments.

Property, plant and Equipment:

This type of assets are also known as Fixed assets. Fixed assets are purchased with aim of using it on a long term to increase the profit of a company. These include the fixtures, buildings, machines, land that is used by the company, tools, and automobiles. Depreciation is also calculated for these assets that are negated from the profit of the company.

Intangible assets:

Intangible assets are those whose value cannot be calculated physically. But, they are very important to the very existence of a business. These include copyrights, brand name, patents, trademarks etc

Tangible assets

Tangible assets are those that have a physical substance, such as currencies, buildings, real estate, vehicles, inventories, equipment, and precious metals. The assets that cannot be classified in any of the above category can be added to the balance sheet under "other assets".