An item on the balance sheet that means the possessions of a company, an organisation or an individual. Assets can be tangible (e.g. a vehicle), or intangible (e.g. goodwill). Assets can be fixed (e.g. land, buildings, vehicles, office furniture) or current (e.g. stock, debtors, cash). A fixed asset is one which is used in the production or supply of goods or services, for rental to others or for administrative purposes and is expected to last for a long period of time, while a current asset is one in which the company trades (e.g. stock) or which is created as a result of trading and expected to be turned back into cash within normal commercial periods of 30, 60 or 90 days, and certainly within twelve months (e.g. debtors for sales). Current assets are part of the company’s working capital. Fixed assets are shown on the balance sheet in their depreciated form – in other words, after depreciation has been expensed out to the profit and loss account.

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