Financial Statements And Their Elements A.BALANCE SHEET
The position of the enterprise is present in the balance
sheet. That statement shows resources and the claims to or
interests in them and provides an indication of the financial
strength of the enterprise.
The balance sheet includes the following elements:
ASSETS
Assets include property, plant and equipment, financial
leases, investments in subsidiaries and other enterprises; long-
term receivables; purchased goodwill, patents, trade Marks and
similar intangibles; marketable securities; current receivables
(or trade debts); inventories; cash and bank balances; and
prepaid expenses.
Assets arise from past events, which may be cash or non-
cash transactions. Assets may be purchased, exchanged for
other assets, self-generated or received as grants or donations.
An asset is recognized when it is reasonably certain that
the future economic benefit embodied in it will flow to the
enterprise.
In a number of countries, intangible assets such as
concessions, patents, licences, trade marks and similar rights
and assets may be recognized in the balance sheet only if they
were acquired for a valuable consideration. A number of
countries allow assets to be carried on the balance sheet only if
the reporting enterprise is the legal owner.
