CheckPoint Classified Balance Sheets

Classified Balance Sheets The balance sheet is a very important part of a businesss success and helps in the decisions made for the future success or failure of the business. While looking at their current assets, long term investments, property, plant, equipment and their intangible assets the company can come up with what type of plan will work in making their company top notch. If a company reads these reports wrong or they are filled out incorrectly the company will find themselves in severe financial problems, this is why they are very important and need to be done correctly. A companys current assets are any assets that can be converted into money or be used in a short amount of time or whichever comes first. Some examples of a companys assets are cash, short term investments, their receivables, their inventories and prepaid taxes. During a companys operating period or FY (fiscal year) their inventory fluctuates up and down by using the purchased items and then re-buying more to replace what was used. This is why their inventory is a short term asset and not a long term asset. From there we go to the long term investments; these are investments that a company invests in which they plan on keeping for a long time. Such investments can be considered to be land, monies set aside for future use of an expansion, and any funds that are redeemable from insurance policies. Now let us look at the property, plant and equipment part of the classified balance sheet. When reporting these on the report the company is reporting all value on the properties, plants and equipment they own that is currently part of their productivity. If the company has land in three different states and each piece of land has an operational plant then they will all come out in this report. Last but not least we will define what a companys intangible assets are. While these assets lack physical existence it does not mean they are any less important to the company than the other assets they control. These assets include items like purchased patents and copyrights, "goodwill". Goodwill is acquired when one company purchases another company and pays more than the estimated market value of the net assets held by the purchased company (Alvis, 2005, p. 1).

Reference Alvis, J. M. (2005). balance Sheets. In Encyclopedia of Business (Vol. 2 ed, p. 1). : Advameg, Inc.