c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

•

• 

Finance may be defined as the provision of money at the time where, it is

required. It concerns with the application of skills in the manipulation, use and control of
money. Different authorities have interpreted the term ³Finance´ differently. However
there are three main approaches to finance.

0? àhe first approach views finance as to providing of funds needed by a business on

most suitable terms. In this approach finances to the raising of funds and to the
study of financial institutions and instruments from where funds can be procured.
0? àhe second approach relates finance to cash.
0? àhe third approach views finance is being concerned with rising of funds and
their effective utilizations.

• 






àhe selection of various fixed asset required creating the desired production
facilities and the decision regards in the level of fixed assets. It is primarily the task that
at the production technical people. àhe decision relating to fixed assets involves huge
funds , a long period of time and is generally irreversible nature affecting the long
term profitability of a concern. An unsound invest decision may prove to be total to the
very existence of the organization. àhus, the management of fixed asset is of vital
importance to any organization.
Fixed assets management is an accounting process that seeks to track fixed assets
for the purposes of financial accounting, preventive maintenance, and theft deterrence.

àhe process of fixed asset management involves;

(i)? celection of most worthy projects or alternative of fixed assets.

(ii)?Arranging the requisite funds of capital for the same.

àhe first importance consideration to be required only that much amount of fixed
assets which will be just sufficient to ensure and efficient running of the business. In

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(1)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

some cases it may be economical to be a certain asset in a lot size. Another important
consideration to be kept in mind is possible increase in demand of the firm¶s product
necessarily expansion of its activities. Hence a firm should have that much amount of
fixed assets.
àhe fixed assets management is that a firm must ensure buffer stocks of certain
essential equipment services to ensure uninterrupted production in this event of
emergencies. cometime, there may be a breakdown in some equipment or services
affecting the entire production. It is always better to have some alternative arrangements
to deal with such situations. But at the same time the cost of carrying such buffer stock
should also be evaluated. Efforts should also be made to minimize the level of buffer
stock of fixed assets be encouraging their maximum utilization period.
Fixed assets are those, which are required and held permanently for a pretty
longtime in the business and are used for the purpose of earning profits. àhis successful
continuance of the business depends upon the maintenance of such assets. àhey are not
meant for release in the ordinary course of business and the utility of these remains so
long as they are in working order, so they are also known as capital assets. Land and
building, plant and machinery, motor vans, furniture and fixture are some examples of
this asset. àhe most commonly tracked assets are:

‘? ÷lant and equipment

‘? Buildings
‘? Fixtures and fittings

àhey are not meant for resale in the ordinary course or business and the utility
of these remains so longs they are in working order, so they are also known as capital
assets. Land and building, plant and machinery, motor vans, furniture and fixture are
some examples of these assets. Financial transactions are recorded in the books keeping
in view the going concern aspect of the business unit. It is assumed the business unit has
a reasonable expectation of continuing business at a profit for an indefinite period of
time.

Intangible assets are nonphysical resources and rights that have a value to the firm
because they give the firm some kind of advantage in the market place. Examples of

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(2)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

intangible assets are goodwill, copyrights, trademarks, patents and computer programs,
and financial assets, including such items as accounts receivable, bonds and stocks.

Assets are formally controlled and managed within larger organizations via the
use of asset tracking tools. àhese monitor the purchasing, upgrading, servicing, licensing,
disposal etc., of both physical and non-physical assets. In a company's balance sheet
certain divisions are required by Generally Accepted Accounting ÷rinciples (GAA÷),
which vary from country to country.

àhe market value of a fixed asset may change may with the passage of
time, but for accounting purpose it continues to be shown in the books at its book value,
I.e., the cost at which it was purchased minus depreciation proved up to date. àhe Cost
concept of account ing, deprecat ion calculated on the basis of historical costs
of old assets is usually lower than of those calculated at current value. àhese results in
more in more profits on paper which, if distributed in full lead to reduction of capital.

 • •
• 

Long-lived property owned by a firm that is used by a firm in the production of its
income. àangible fixed assets include real estate, plant, and equipment. Intangible fixed
assets include patents, trademarks, and customer recognition.

An asset with a long-term useful life that a company uses to make its products or
provide its services. ctrictly speaking, a fixed asset is any asset that the company does not
expect to sell for at least a year, but the term often refers to assets a company expects to
have indefinitely. Common examples of fixed assets are real estate and factories, which a
company holds for long periods of time.

Land, buildings, equipment, machinery, vehicles, leasehold improvements, and

other such items. Fixed assets are not consumed or sold during the normal course of a
business but their owner uses them to carry on its operations. In accounting, 'fixed' does
not necessarily mean 'immovable;' any asset expected to last, or be in use for, more than

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(3)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

one year is considered a fixed asset. On a balance sheet, these assets are shown at their
book value (purchase price less depreciation).




• • 



Valuation of fixed assets is important in order to have fair measure of loss and
financial position of the concern. Fixed assets are used for many years, the value of these
assets decreases with their use or with time or for other reasons. A portions of fixed
reduced by use is converted into cash through charging depreciation .For correct
measurement of income proper measurement of depreciation is essential, as constitutes a
part of the total cost of production.




±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(4)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±


 


Fixed Assets plays very important role in relating company¶s objectives of the
firm. àhese fixed assets are not convertible or not liquidity over a period of time. àhe
total owner funds and long term liabilities are invested in fixed assets.
cince fixed assets playing dominant role in total business, the firm has realized
the effective utilization of fixed assets. It is analyzing and utilized properly it effects long
term sustainability of the firms which may affect liquidity and solvency and profitability
positions of the company. àhe idle of fixed assets lead a tremendous increase in financial
cost and intangible cost associate to it. co there is need for the companies to evaluate
fixed assets performance analysis time to time by comparing with previous performance.
co choose a study to conduct on the fixed assets analysis of  
  

using ratio in comparison with previous year performance. àhe title of the project is


 !"

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(5)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

#$ 
• 
 


? àhe study conducted to evaluate fixed assets performance of

KEcORAM CEMENà.

? àhe study is conducted to evaluate the fixed asset turnover of

KEcORAM CEMENà INDUcàRIEc.

? àhe study is made to know the amount of capital expenditure

made by the company during study period.

? àhe study is conducted to evaluate depreciation and method of

depreciation adopted by KEcORAM CEMENà INDUcàRIEc.

? àhe study is conducted to know the amount of finance made

by long term liabilities and owner funds towards fixed assets.

? ctudy is conducted to evaluate that if fixed assets are liquidates.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(6)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±


 
 


àhe data used for analysis and interpretation from annual reports of the
company that is secondary forms of data. Ratio analysis is used for calculation of
purpose. àhe project is presented by using tables, graphs and with their
interpretations. No survey is under taken or observation study is conducted in
evaluating fixed assets performance of ³ 
 
• 
• %"
àhere are two types of data available that are primary and secondary data.
&'!'
÷rimary is original data gathered from the dealers specifically on the
project at hand most of such information has been collected from internal interviews
and discussions with various officials in the finance department of cement limited.
('
cecondary data means data that are already available i.e. they refer to the
data which have already en collected and analyzed by someone else. When the
researcher utilizes secondary data, then he has to look into various sources from
where he can obtain them .In this case he is certainly not confronted with the
problems that are usually associated with the collection of original data.
‘? àhe data gathering method is adopted purely from secondary
sources.
‘? àhe theoretical content is gathered from eminent texts books and
reference and library at Kesoram Cement Industries.
‘? àhe financial data and information is gathered from eminent texts
books and reference and library at Kesoram Cement Industries.
‘? Interpretation, Conclusions and cuggestions are purely base on my
opinion and suggestions provided by the project guide.




±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(7)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±


& 
 


àhe project was covered on fixed Asset of KEcORAM CEMENà, drawn from
Annul Report of the company. àhe fixed assets consider in the project are which cannot
be converted into cash within one year. Ratio analysis is used for evaluating fixed asset
performance of  
 
• 
• . àhe subject matter is limited to
fixed assets and its performance but not any other areas of accounting, corporate,
marketing and financial matters.



••


• 
 


? àhe study period of 45 days as prescribed by ³$)*' *'+
(* (

,'´.
? àhe study is limited up to the date and information provided KEcORAM
CEMENà?and its annual reports.
? àhe report will not provide exact Fixed Assets status and position in KEcORAM
CEMENà it may vary from time to time and situation to situation.
? àhis report is not helpful in investing in KEcORAM CEMENà INDUcàRIEc?
either through disinvestments or capital market.
? àhe accounting procedure and other accounting principles are limited by the
company.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(8)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

• 
&• 

Cement is the basic construction material used extensively all over the world.
àhe per capital consumption of cement is universally acknowledged as one of the
measure of the country. àhe per capital consumption of cement in India is estimated at
approximately Rs. 57 lack, and India is the third lowest consumer in the world. àhus
there is a excellent potential growth of cement industry in India.
Cement was first patented in 1824 in England. By 1961, cement production in the
country achieved self sufficiency and import of cement was stopped. In August, 1965 the
Government accepted the principle to decontrol the prices and distribution of cement. A
scheme of decontrol drawn and brought into effect from January, 1996 and a Cement
Allocation and Coordination Organization (CACO) was formed. As the decontrol
scheme did not prove to the satisfaction of the Government, CACO was abolished and its
functions over by the cement controller attached by the Government Corporation of India
Limited. ÷rices of cement are revised by the Government from time to time based on
studies and reports of Bureau of Industrial cost and prices.
àhe company was incorporated at Calcutta. àhe main object of the Company is
to manufacture textiles, rayon yarn, cement, spun pipes and fire bricks.
1951 ± 8,00,000 bonus equity shares of Rs 2.50 each issued in prop. In July shares
consolidated into Rs 15 each.
1954 - In March, 8 lakh bonus shares issued in prop 1:1 shares then consolidated
into Rs 10 each.
1956 - 1 lakh right 2nd pref shares offered at par. Only 10,000 shares take up
balance offered to public.
1961 - àhe name of the company was changed to Kesoram Industries & Cotton
Mills Limited on August 30, and the same has further changed to Kesoram Industries
Limited on the 9th July, 1986.
1965 - àhe Company took on long lease one refractory unit at Kulti, West
Bengal, for a period of five years.
1969 - àhe Company established its, first cement plant known as Kesoram
Cement at Basantnagar, District Karimnagar, Andhra ÷radesh.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(9)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

1980 - àhere was a loss of production of 37 days in Cement Division due to

break-down in one of the kilns. Cyclones with heavy rains and power crisis affected
production.
1982 - àhe Company had to declare a lock-out because of labour unrest. àhe
lock-out was lifted on 20th May, but the workmen did not return to duty as the
suggestions made were not acceptable to them. After making fresh suggestions with
modifications, the strike was withdrawn from 29th June. Normal working was resumed
by the end of July.
àhe Company secured MRà÷ clearance to set up another cement unit at cedam in
Karnataka ctate with an annual capacity of 5 lakh tonnes. A new plant and equipment
were being installed to improve the quality of production.
Kesoram Cement has set up a 15 MW capacity power plant to facilitate for
uninterrupted power supply for manufacturing of cement, which starts on 24th August,
1997.
àhe combined Kesoram Industries started its business in 1919 and is under the B
K Birla group. Kesoram Industries Ltd. commenced its business with a mill for textile
manufacture located in Kolkata. àhe company has grown over the years to become a
diversified company by entering into new areas of business and also by acquisitions and
mergers. àhe Company Kesoram Industries main business includes manufacturing of
flaps and tubes, cement, spun pipes, caustic soda, automobile tires, refractories, heavy
chemicals, and hydrochloric acid. Kesoram Industries has 2 units for the production of
cement which are Kesoram Cement and Vasavadatta Cement. àhe company's 2 plants for
cement manufacture are in cedam, Karnataka and in Basant Nagar, Andhra ÷radesh
production capacity of these 2 plants is around 2.1 million à÷A per year.

àhe Company Industries Kesoram has a production plant for the manufacture of
automotive tubes and tyres with the capacity of 1 million units located in Orissa. àhe
company's tire-making unit is called Birla àires. àhe Kesoram Industries Company has
collaboration with ÷irelli UK for its tire division. àhe Kesoram Industries Ltd has a
refractory unit with the production capacity of 36,500 Mà÷A at Burdwan, West Bengal.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(10)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

àhe total income of the Company Kesoram Industries amounted to Rs. 4927.82
million in 2005-2006 and the next year the figure stood at Rs. 6792.81 million. àhe gross
profit of the Kesoram Industries Company amounted to Rs. 634.01 million in 2005-2006
and the next year the figure increased to Rs. 806.82 million.Kesoram Industries has
registered growth in its profit levels due to the fact that the company has strictly
maintained the quality of its products.







±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(11)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

&
&• 
Kesoram Cement Industry is one of the leading manufacturers cement in India,
incorporated by the promoters of Birla Group Company. It is a dry process cement plant.
àhe plant capacity is 8.26 lakh tones per annum; it is located at Basanthnagar in
Karimnagar Dist, Andhra ÷radesh which is 8 km away from the Ramagundam Railway
ctation, linking Chennai to New Delhi.
àhe company¶s first unit Basanthnagar with a capacity of 2.1 lakh tones per
annum in 1969. àhe second unit was set up in the year 1971 with a capacity 2.1 lakh
tones per annum and the third unit with a capacity of 2.5 lakh tones per annum went on
stream in the year 1978. àhe coal for this company is being supplied by cingareni
Collieries Company limited.
Kesoram Cement Industry distinguished itself all the cement factories in India by
bagging the National ÷roductivity Award Consecutively for two years i.e., for the year
1985-86 and 1986-87.
àhe Federation of Andhra ÷radesh Chamber of Commerce and Industries
(FA÷CCI) also conferred on Kesoram Cement, an Award for Best Industrial promotion
expansion efforts in the state for the year 1984. Kesoram also bagged FA÷CCI award for
³Best Family ÷lanning Effort in the ctate´ for the year 1987-88.
One among the industrial giants in the country today, serving the nation on
industrial front, Kesoram Industries Ltd., has a chequered and eventful history dating
back to the twenties when the Industrial House of Birla acquired it. With only a àextile
Mill under is banner in 1924, it grew form strength and spread its activities to newer
fields Rayon, cpun ÷ipes àransparent paper, ÷ulp, àyres, Refectories and other products.
Birla supreme is popular brand of Kesoram Cement from its prestigious plant of
Basanthnagar, in A.÷., which has outstanding track record in performance and
productivity, serving the nation for the last two and half decades. It has proved its
distinction by bagging several national awards and state awards. It also has the
distinction of achieving optimum capacity utilization.
Kesoram offers a choice of top quality ÷ortland Cement for light, heavy
constructions and allied applications. Quality is built to every fact of the operations. As
is the preference for quality, so is the demand for the product.
±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(12)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

àhe limestone is rich in calcium carbonate, a key factor that influences the quality
of the final product. àhe dry process technology used in the late computerized
monitoring overseas the manufacturing process. camples are sent regularly to the bureau
of Indian ctandards, National Council of Construction and Building Material for
certification of derived quality norms.
àhe company has actively undertaken promotional measures for promoting their
product through different media, which includes the use of hoardings, Compliments,
Newspapers etc.
Kesoram Cement is undertaking the marketing activities extensively in the states
of Andhra ÷radesh, Karnataka, àamilnadu, Kerala, Maharashtra and Gujarath. In Andhra
÷radesh sales depots are located in different areas like Karimnagar, Warangal,
Nizamabad, Vijayawada and Nellore. In other estates it has opened around 10 depots.
àhe market share of Kesoram Cement in the all India Cement market is 1.19% in A.÷., it
is a 7.05%.
Kesoram cement Industry is one of the leading manufacturers of cement in India
Kesoram cement is a division of Kesoram Industries Limited. àhe latter is a 6 decades
old company belonging to the house of Birlas. It is a dry process cement plant. àhe plant
capacity is 8.26 Lakh tonnes per annum. It is located at Basantnagar in Karimnagar
District Andhra ÷radesh. àhe Chairman of the company is cyt. B.K.Birla.
àhe first unit at Basantnagar with a capacity of 2.1 lakh tonnes per annum in corporating
suspension preheater system was commissioned during the year 1969.

àhe second unit was setup in the year 1991 with a capacity of 2.1 lakh tonnes per annum
and the third unit with a capacity at 2.5 lakh tonnes per annum went oh stream in the year
1978.àhe coal for this company is being supplied by singareni colleries and the power is
obtained from A÷cEB.

àhe company being a continuous process industry works around the clock and has an
excellent record of performance achieving over 100% capacity utilization.Kesoram
cement belongs to the Birla Group of Companies, one of the industrial giants in the
country.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(13)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

Family planning camps are conducted regularly with the help of the District
medical and Health Authorities at the government. àhe company propagates the
importance of family welfare to its employees and in the neighboring villages through
their medical officer and rural development officer.

Not only the employees of the factory are well taken care of, but the company
pays lot of attention towards the rural development activities. àwelve villages are
adopted and the company has extended help in constructing temples, roads, schools
buildings, conducting training programmers to the farmers, eye surgical camps, health
check up camps etc.,

Kesoram Cement Industry distinguished itself among on the cement factories in

India by bagging the national productivity Award consecutively for two years i.e., for
the year 1985-86 and 87. àhe Federation of A.÷ chambers and commerce and Industries

Kesoram Cement is undertaking the marketing activities extensively in the states

of Andhra ÷radesh, Karnataka, àamilnadu, Kerala, Maharashtra and Gujarat. In Andhra
÷radesh sales depots are located in different areas like Karimnagar, Warangal,
Nizamabad, Vijayawada and Nellore. In other estates it has opened around 10 depots.
àhe company contributes about 12.5 crores rupees to the state economy and 26 crores
rupees to the national economy per annum.




±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(14)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

 
 &• 
• :

a) àextiles : Kesoram Industries Ltd.,

42, Garden Reach Road,
Calcutta ± 700 024.
b) Rayon : Kesoram Rayon àriennia (po),
Dist. Hoogly,
West Bengal.
c) cpun ÷ipes : Kesoram cpun ÷ipe & Foundries,
Bansberia (po), Dist. Hoogly,
West Bengal.
d) Cement : Kesoram Cement,
Basanthnagar ± 505 187,
Dist. Karimnagar, A.÷.
e) Cement : Vasavadatta Cement,
cedam ± 585 222,
Dist: Gulbargah, Karnataka.
f) àyres : Birla àyres,
chivam Chambers,
53, cyed Amir Ali Avenue,
Calcutta-700019.










±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(15)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

 • -•


 
In financial accounting, assets are economic resources. Anything tangible or
intangible that is capable of being owned or controlled to produce value and that is held
to have positive economic value is considered an asset. cimply stated, assets represent
ownership of value that can be converted into cash.

àhe balance sheet of a firm records the monetary value of the assets owned by the
firm. It is money and other valuables belonging to an individual or business. àwo major
asset classes are tangible assets and intangible assets. àangible assets contain various
subclasses, including current assets and fixed assets. Current assets include inventory,
while fixed assets include such items as buildings and equipment.

 • •
• 

An asset not readily convertible to cash that is used in the normal course of
business. Examples of fixed assets include machinery, buildings, and fixtures. A firm
whose total assets are made up primarily of fixed assets is in a less liquid financial
position, thus entailing greater risk of a big tumble in profits if its revenues fall.

A long-term tangible piece of property that a firm owns and uses in the production
of its income and is not expected to be consumed or converted into cash any sooner than
at least one year's time.

& 



In the financial accounting sense of the term, it is not necessary to be able to

legally enforce the asset's benefit for qualifying a resource as being an asset, provided the
entity can control its use by other means. It is important to understand that in an
accounting sense an asset is not the same as ownership. Assets are equal to "equity" plus
"liabilities."

àhe accounting equation relates assets, liabilities, and owner's equity:

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(16)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

Assets = Liabilities +ctockholder's Equity (Owner's Equity).àhe accounting

equation is the mathematical structure of the sheet. Assets are listed on the balance sheet.
cimilarly, in economics an asset is any form in which wealth can be held.

÷robably the most accepted accounting definition of asset is the one used by the
International Accounting ctandards Board . "An asset is a resource controlled by the
enterprise as a result of past events and from which future economic benefits are expected
to flow to the enterprise."

+''

Current assets are cash and other assets expected to be converted to cash, sold, or
consumed either in a year or in the operating cycle (whichever is longer), without
disturbing the normal operations of a business. àhese assets are continually turned over in
the course of a business during normal business activity. àhere are 5 major items
included into current assets:

1.? Cash and cash equivalents: It is the most liquid asset, which includes currency,
deposit accounts, and negotiable instruments (e.g., money orders, cheque, and
bank drafts).
2.? chort-term investments : Include securities bought and held for sale in the near
future to generate income on short-term price differences (trading securities).
3.? Receivables : Usually reported as net of allowance for uncollectible accounts.
4.? Inventory: àrading these assets is a normal business of a company. àhe inventory
value reported on the balance sheet is usually the historical cost or fair market
value, whichever is lower. àhis is known as the "lower of cost or market" rule.
5.? ÷repaid expenses : àhese are expenses paid in cash and recorded as assets before
they are used or consumed (a common example is insurance). cee also adjusting
entries.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(17)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

 .'!,!

Often referred to simply as "investments". Long-term investments are to be held for

many years and are not intended to be disposed of in the near future. àhis group usually
consists of four types of investments:

1.? Investments in securities such as bonds, common stock, or long-term notes.

2.? Investments in fixed assets not used in operations (e.g., land held for sale).
3.? Investments in special funds (e.g. sinking funds or pension funds).

Different forms of insurance may also be treated as long term investments.



Also referred to as ÷÷E (property, plant, and equipment), these are purchased for
continued and long-term use in earning profit in a business. àhis group includes as an
asset land, buildings, machinery, furniture, tools, and certain wasting resources e.g.,
timberland and minerals. àhey are written off against profits over their anticipated life by
charging depreciation expenses (with exception of land assets). Accumulated
depreciation is shown in the face of the balance sheet or in the notes.?

àhese are also called capital assets in management accounting.

• /

Intangible assets lack physical substance and usually are very hard to evaluate.
àhey include patents, copyrights, franchises, goodwill, trademarks, trade names, etc.
àhese assets are (according to Uc GAA÷) amortized to expense over 5 to 40 years with
the exception of goodwill.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(18)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

 /

àangible assets are those that have a physical substance and can be touched, such
as currencies, buildings, real estate, vehicles, inventories, equipment, and precious
metals.

•'!

In Information technology, chiefly in Information security, data needed to conduct

the organization business and the technical equipment to manage (input, store, display,
print) are called information asset. àhey can represent a large portion of intangible and
tangible asset of an organization.

• 




•
•

It should be noted that - other than software companies and the like - employees are
not considered as assets, like machinery is, even though they are capable producing
value.

‘? àhe probable present benefit involves a capacity, singly or in combination with

other assets, in the case of profit oriented enterprises, to contribute directly or
indirectly to future net cash flows, and, in the case of not-for-profit organizations,
to provide services;
‘? àhe entity can control access to the benefit;
‘? àhe transaction or event giving rise to the entity's right to, or control of, the
benefit has already occurred.






‘? Fixed assets are going to be a stable source of income over a period. Variable will
change in price over a given period. Where variable can bring a higher rate of
return fixed will always bring a steady sure rate of return.
‘? Aou get your money back straight away.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(19)±±±±±±±±±±±±±±±±±±±±±±±±
c
 ±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±±

•





‘? àhe assets may grow in value quicker than what the cash can yield elsewhere.
‘? Aou can be taxed on any capital gains.

• 

& 

i. Buildings and such attached facilities as heating, lighting and ventilation.

ii. ctructures (Meaning docks, bridges, wharves, piers, tracks, reservoirs, tunnels,
smokestacks and other engineered facilities or other things constructed or attached to the
land. Hereinafter the same)

iii. Machinery and equipment as well as conveyors, hoists, conveying facilities such as
cranes and other attached facilities.

iv. Vessels and marine transport devices.

v. Rolling stock, automobiles, and other transport devices.

•&

 
Fixed assets are the asset which cannot be liquidates in to cash within one year.
àhe large amount of the company is invested in these assets. Every year the company
investment a additional fund in these assets directly or indirectly the survival and other
objectives of the company purely depends on operating performance of management in
effective utilization of their assets. Firm has evaluate the performance of fixed assets with
proportion of employees on net assets turn over and other parameters which is help full
for evaluating the performance of fixed assets.

±±±±±±±±±±±±±±±±±±±±±±±±±±±±±(20)±±±±±±±±±±±±±±±±±±±±±±±±