It's not all Current
The assets on the Balance Sheet of a business are not always current. There are long-term assets which include investments that are owned or held by the company for a period longer than
Art copyright Trusha Desai Innovation Management Inc.
a year. These could be GICs (Guaranteed Investment Certificates), Stocks, Mutual Funds, ETFs (Exchange-Traded Funds) and Bonds.
When we evaluate the long-term assets, we need to bear in mind the risk tolerance of the business owners and related parties. If an interest rate of 0.75% or less on an annual basis seems to be negligible on the surface, it is certainly better than losing one's shirt while betting on a lost cause.
Property, plant and equipment are also examples of long-term assets, though some accountants may prefer to categorize them as fixed assets. It is essential that information of purchase, sale and serial numbers of fixed assets are securely maintained in the accounting software.
Goodwill, patents and copyrights that are intangible assets also fall under long-term assets. These come forcibly into play when succession planning is being done.
For discussion of your financial statements or for bookkeeping, GST, tax and management consulting issues, please contact me #TrushaDesai.com