Balance Sheet - Fixed Assets or Long Term Assets

The Fixed assets of a company include land, buildings, equipments and office furnishings.

In balance sheet, the most "liquid" asset will be placed at the beginning of the asset side in balance sheet. Cash and cash equivalent such as investment and other current assets will be listed first and follow by fixed assets at the bottom. Fixed assets also known as long tern asset in some balance sheet statement.

Balance Sheet - Fixed Assets Valuation

Investor should pay less attention to the fixed assets in the balance and focusing on earning report and working capital.

Established accounting practice requires that assets be shown at their purchase cost, or at their fair value if it is lower than the actual cost. An assets may be revalued at the higher cost but it is difficult to determine the fair value of the fixed assets because there is seldom a ready market for them. So, the most common practices is state fixed assets value at cost, regardless of whether this represents its market value at the the time of the balance sheet statement.

In some cases, an arbitrary values have been placed on the fixed assets value which bear little relation to the actual cost of their subsequent fair value. For stock analysis purposes, investor should pay less attention to the fixed assets in the balance and focusing on earning report and working capital.