In the earlier blog we looked at the current assets and current liabilities, we now take another look at the other components in the Balance sheet.
In the last blog we also got to know the reason why these are called - current (assets or liability), so one could safely assume that the ones that do not fall into this category would generally be of a longer time frame in nature. What would these be?
If we look at the assets side of the Balance sheet, we realize that the ones that do not get converted in a year’s cycle should generally - of the nature of buildings, furniture, machinery etc. These are called the Fixed Assets.
On the liability side, the ones which of long term nature could further be looked at as two components - A debt which is long term (would take a long time to clear off) or could be the equity that is put in by the owner. Thus we would generally have two sub-components - Long term Liabilities and Owner's Equity.
We could represent the balance sheet in the following manner.
Read in Kannada:
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