ASSETS
Assets are present economic resources controlled (used) by an entity,
as a result of past events (assets were bought).
An economic resource is a right that has the potential to produce
economic benefits.
CURRENT ASSETS NON-CURRENT ASSETS
An asset is classified as current All other assets (that is, assets
when it satisfies any of the that are not classified as current
following criteria (IAS 1.66): assets are classified as non-
current) (IAS 1.60).
Non-current assets include
• • It is expected to be tangible, intangible and financial
converted into money (realised) or assets of a long-term nature. (In
is intended for sale or this module, we will only concern
consumption in the entity’s normal ourselves with tangible non-
operating cycle. current assets.)
It is not the intention of the
• • It is held primarily for entity to sell non-current assets
the purpose of being traded. but to use these assets over the
long-term in its business
operations to earn an income.
Non-current assets are those
• • It is expected to be assets with a useful life of
converted into money (realised) longer than one year.
within 12 months of the statement
of financial position date.
• • It is cash or cash equivalent unless it is restricted from
being exchanged or used to settle a liability for at least 12 months
after the end of the reporting period.
Examples of current assets are Examples of non-current assets are
• • trading inventories • • land
• • consumable stores on hand • • buildings
• • debtors/trade receivables • • vehicles
• • accrued income • • furniture
• • prepaid expenses • • equipment
• • bank (favourable balance) • • machinery
• • cash float
• • petty cash
, LIABILITIES
Liabilities are present obligations (debts) of an entity to transfer
economic resources (payments) as a result of past events (borrowing or
purchasing).
An obligation is a duty or a responsibility that an entity has no
practical ability to avoid.
-
CURRENT LIABILITIES NON-CURRENT LIABILITIES
A liability is classified as All other liabilities (that is,
current when it satisfies any of liabilities that are not
the following criteria (IAS 1.69): classified as current liabilities
are classified as non-current)
(IAS 1.69).
Non-current liabilities are long-
• • It is expected to be term debts and have to be settled
settled in the entity’s normal after one year of the statement of
operating cycle (usually one financial position date.
year).
• • It is held primarily for the purpose of being traded.
.
• • It is expected to be
settled within 12 months after the
statement of financial position
date.
• • The entity does not have an unconditional right to defer
settlement of the liability for at least 12 months after the end of
the reporting period.
Examples of current liabilities Examples of non-current
are liabilities are
• • creditors/trade payables • • long-term loans
• • bank overdrafts • • mortgage
• • current portion of long- • • debentures
term borrowings
• • short-term borrowings
• • accrued expenses
• • income received in advance
Format for the STATEMENT OF FINANCIAL
POSITION
Assets are present economic resources controlled (used) by an entity,
as a result of past events (assets were bought).
An economic resource is a right that has the potential to produce
economic benefits.
CURRENT ASSETS NON-CURRENT ASSETS
An asset is classified as current All other assets (that is, assets
when it satisfies any of the that are not classified as current
following criteria (IAS 1.66): assets are classified as non-
current) (IAS 1.60).
Non-current assets include
• • It is expected to be tangible, intangible and financial
converted into money (realised) or assets of a long-term nature. (In
is intended for sale or this module, we will only concern
consumption in the entity’s normal ourselves with tangible non-
operating cycle. current assets.)
It is not the intention of the
• • It is held primarily for entity to sell non-current assets
the purpose of being traded. but to use these assets over the
long-term in its business
operations to earn an income.
Non-current assets are those
• • It is expected to be assets with a useful life of
converted into money (realised) longer than one year.
within 12 months of the statement
of financial position date.
• • It is cash or cash equivalent unless it is restricted from
being exchanged or used to settle a liability for at least 12 months
after the end of the reporting period.
Examples of current assets are Examples of non-current assets are
• • trading inventories • • land
• • consumable stores on hand • • buildings
• • debtors/trade receivables • • vehicles
• • accrued income • • furniture
• • prepaid expenses • • equipment
• • bank (favourable balance) • • machinery
• • cash float
• • petty cash
, LIABILITIES
Liabilities are present obligations (debts) of an entity to transfer
economic resources (payments) as a result of past events (borrowing or
purchasing).
An obligation is a duty or a responsibility that an entity has no
practical ability to avoid.
-
CURRENT LIABILITIES NON-CURRENT LIABILITIES
A liability is classified as All other liabilities (that is,
current when it satisfies any of liabilities that are not
the following criteria (IAS 1.69): classified as current liabilities
are classified as non-current)
(IAS 1.69).
Non-current liabilities are long-
• • It is expected to be term debts and have to be settled
settled in the entity’s normal after one year of the statement of
operating cycle (usually one financial position date.
year).
• • It is held primarily for the purpose of being traded.
.
• • It is expected to be
settled within 12 months after the
statement of financial position
date.
• • The entity does not have an unconditional right to defer
settlement of the liability for at least 12 months after the end of
the reporting period.
Examples of current liabilities Examples of non-current
are liabilities are
• • creditors/trade payables • • long-term loans
• • bank overdrafts • • mortgage
• • current portion of long- • • debentures
term borrowings
• • short-term borrowings
• • accrued expenses
• • income received in advance
Format for the STATEMENT OF FINANCIAL
POSITION
