Fixed assets liquidating current assests

Posted by / 30-Dec-2020 19:58

Fixed assets liquidating current assests

Fixed assets are particularly important to capital-intensive industries, such as manufacturing, that require large investments in PP&E.

Tangible assets are subject to periodic depreciation, as intangible assets are subject to amortization.Land cannot be depreciated unless it contains natural resources, in which case depletion would be recorded.Both current assets and fixed assets appear on the balance sheet, with current assets meant to be used or converted to cash in the short-term (less than one year) and fixed assets meant to be utilized for the longer-term (greater than one year).The corporation can then match the asset's cost with its long-term value.How a business depreciates an asset can cause its book value—the asset value that appears on the balance sheet—to differ from the current market value at which the asset could sell.

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Investors and creditors use these reports to determine a company's financial health and to decide whether to buy shares in or lend money to the business.

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