Working capital is greater than non-current assets. Non-current and current assets

current assets are assets that serve or mature within 12 months, or during the entity's normal operating cycle (if longer than 1 year). Many current assets are used simultaneously when they are released into production (for example, raw materials and materials). Current assets are one of two groups of assets of the organization (the second is non-current assets). Accordingly, one of the two sections of the Asset of the balance sheet is called "Current Assets". Current assets are also called current assets.

Composition of current assets

In accordance with the form of the balance sheet, the following current assets are distinguished:

VAT on purchased assets;

accounts receivable;

financial investments (excluding cash equivalents);

cash and cash equivalents;

other assets that meet the characteristics of current assets.

Accounts receivable and financial investments are classified as current assets only if their maturity is less than 1 year, or the period exceeds 1 year, but the organization is confident in the high liquidity of these assets, the ability to quickly and without loss convert them into cash (i.e. e. to sell).

Current assets, in principle, have a higher degree of liquidity than non-current assets. And money, as part of current assets, has absolute liquidity.

Analysis of current assets

A sufficient amount of current assets is necessary for the smooth operation of the enterprise, whether it be materials used in the production process, or cash for settlements with suppliers. Therefore, the analysis of the liquidity of assets is central to the financial analysis of enterprises. In the course of the analysis, they study the sufficiency of liquid assets for timely settlements with suppliers and contractors for current debt. To do this, current assets in general and their groups according to the degree of liquidity are compared with the total value of the organization's short-term liabilities on the same date (liquidity ratios are calculated, including automatically using special programs).

A high proportion of current assets is typical for material-intensive industries and trade organizations. The higher the share of current assets (and, accordingly, the lower the share of non-current assets), the more the organization can attract short-term financing (short-term loans, deferred payments to suppliers, etc.) without compromising its financial stability.

Fixed assets- these are assets, the term of use (repayment) of which is more than one year. The total amount of the company's assets consists of non-current and current assets. Accordingly, non-current assets are one of the two sections of the Assets of the balance sheet.

Composition of non-current assets

Non-current assets include:

intangible assets;

research and development results;

fixed assets;

profitable investment in material values;

financial investments, the return of which is expected not earlier than in a year;

Deferred tax assets;

other assets with signs of non-current assets.

In fact, non-current assets include labor instruments (machines and equipment) that are consumed in the process of use not at once (as materials), but over a long period, and liabilities receivable no earlier than 12 months later.

By the ratio of the share of current and non-current assets, one can judge the nature of production. So, capital-intensive enterprises (for example, telecommunications) are characterized by a large share of non-current assets, and material-intensive (or commodity-intensive, like trade) - a small one.

Analysis of non-current assets

Non-current assets require long-term investments, so the sources of their acquisition should be mainly the organization's own capital, and partly long-term borrowed funds. Therefore, the more capital-intensive production, the greater should be the share of equity in the sources of financing of the enterprise.

Non-current assets have less liquidity than current assets, i.e., they are more difficult to sell by converting them into cash. In general, liquidity, as one of the indicators of financial stability, depends on the structure of the enterprise's assets and the sources from which their purchase was financed (see all liquidity ratios in the Financial Analyst's Handbook).

It should be noted that the maturity of an asset is not always a sign for classifying an asset as a current or non-current asset. The liquidity of the asset also plays a role. For example, accounts receivable due in 2 years would normally be treated as a non-current asset. However, an entity's confidence in its ability to sell without loss at any time prior to that date may be a reason to classify accounts receivable into current assets.

End of work -

This topic belongs to:

PBU 6/01 OS accounting. The procedure for recognition of fixed assets in accounting. Organization of analytical accounting of fixed assets. Primary documentation on OS accounting and inventory

Definition and classification of intangible assets accounting intangible assets is regulated by the regulation on accounting accounting.

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Assets are resources that are at the disposal of the organization. Their use leads to an increase in economic benefits in the future period. These include tangible and intangible assets that belong to the organization for the required period.

Assets are negotiable and non-current. Circulating allow capital to be constantly in circulation. They combine all the funds of the organization, such as receivables, stocks, financial investments and others. The main working capital is materials, but the most liquid is cash.

Current assets have their own classification:

In order to competently manage the financial part of the organization, you need to familiarize yourself with main stages of current assets management. First you need to consider and analyze the existing means in order to be the ability to choose the policy of disposing of the company's property.

This operation is best left to a qualified employee, since analysis is an important aspect in cash management. After that, it is necessary to improve the financial condition, for this it is necessary to optimize all the lines in the balance sheet and accelerate the turnover of assets.

After competently carrying out these stages, the organization can observe increase in return on cash. But do not forget that you need to minimize the costs of working capital from the operating cycle itself in production. To increase the liquidity of assets, it is necessary to increase the main indicator - turnover of current assets.

At the production stage, it is still possible to reduce the cycle time and increase its activity without interruption. In this process should be minimized all waste in the recycling process.

On the stage production stocks it is possible to establish advanced consumption rates and constant revisions of all surpluses and residues. Another important point is supplier search with prices lower than what is already being bought, and not with worse quality, so that the sales and service of the enterprise do not suffer.

At the conversion stage, you can sell products faster and hire more qualified marketers. These items can help reduce accounts payable and receivable.

During their turnover, assets pass three stages. For a high-quality turnover, production must go through all the stages in turn.

1. The first stage - monetary. During this period, cash is transferred to the form of inventories in production.
2. At the second stage, productive, all products are issued partially in advance, at the expense of already used stocks. Advances are used for wages and fixed assets.
3. The third stage is the same with advances, but at this stage everything is reimbursed by receiving revenue from goods sold. These stages help to balance the entire turnover of assets.

When a qualified person performs a current asset analysis, it is necessary to evaluate their dynamics and quantity. If the ratio of dynamics to hard-to-sell funds increases, then liquidity worsens at the enterprise, it is necessary to urgently change the situation.

Non-current assets- this is something that no enterprise can do without, everything that exists throughout the entire activity of the organization. For example, the premises in which production is carried out are inactive non-current assets.

The active part includes technical accessories of production and their devices. We list the rest of the property of this class: premises under construction, natural values, wildlife, any intellectual value.

They are rarely written off, which is why they are non-current. The positive features of such values ​​are:

• resistance to any inflation;
• stable income from them;
• the ability to increase the size of the activity;
• reduction in inventory costs.

They also have disadvantages, since any real estate loses its presentation and value over time. They cannot be changed, they are difficult to manage, so they are classified as low-liquid property.

Non-current assets are divided according to their functionality into such categories:

1. fixed assets. They express material (labor) means, which eventually turn into the cost of finished goods.
2. Intangible assets. Accordingly, they do not include cash, they perform other activities.
3. Capital investments in progress. These are the amounts spent on the construction of the main facilities throughout the entire period of the enterprise's operation.
4. cars and equipment. Mounting equipment and other equipment.
5. . Those investments that have been relevant for more than a year.
6. Other non-current property.

By type of activity in the enterprise, they are:

1. Investment.
2. Operating.
3. Non-production.

By the nature of the property are:

1. Own.
2. Rented.

There are non-current assets that have a long life and the ability to take them from the organization's property in order to pay debts, for example. They are named - movable. There is an opposite to them, which cannot be taken from the property - immovable non-current assets.

Non-current operating assets have their own turnover. First, the initial price enters circulation, which goes into depreciation, which, in turn, goes into the commodity. This whole chain ends with the accumulation of depreciation, and they are invested in non-current assets. And so in a circle.

fixed assets- These are non-current assets that the company uses for more than one year. The highlight of such funds is one form throughout the entire period of their use.

Intangible called non-monetary funds that have a long-term operation. They are identifiable and non-identifiable. In the first case, this is when the right to intellectual property has a long period of use.

Long-term financial investments It is a non-current property that will bring profit after a certain time. For example, investment in securities, own capital, other enterprises.

Analysis types

Exist several techniques for analyzing non-current assets at the enterprise.

When they are put into use, it is necessary to analyze the initial cost, that is, calculate how much was spent on the purchase of assets (taking into account the service). But if they were changed, the initial cost must be recalculated.

It is this cost, taking into account modernization, that has the name - replacement cost of assets.

But the difference between the first two rates is residual value This amount is included in the balance sheet.

Market value- the name speaks for itself, this is the amount for which the goods are bought on the market.

Liquidation value issued when the organization is on the verge of bankruptcy.

Periodically, the organization must make investments in non-current assets. Attachments have four types:

1. Purchase of natural objects, fixed assets.
2. Construction of fixed assets.
3. Creation.
4. Formation.

Such investments in the future will bring significant income for the company.

If we sum up current and non-current assets, we get total property of the enterprise. From these lines of the balance sheet, you can draw a lot of information about the financial position of the enterprise for a certain period. Both indicators are equally important for the productive activities of any organization.

The essence and composition of working capital are presented in this lecture.

What is the difference between non-current and current assets? The answer to this question can be given by any accountant from the height of his professionalism, but we will try to look at the question through the eyes of a simple layman.

To work even in the smallest production, you need to know what makes up profit and what makes up costs, especially if you are a financially responsible person.

Many administrative, disciplinary and even criminal acts are committed by people out of ignorance of the internal "kitchen" of production (and those who know it are intentional, but this is not about that).

Be that as it may, understanding assets is useful for any person, not necessarily an accountant and not necessarily a production employee.

Fixed assets

The non-current assets of an enterprise are fixed assets- all that is not directly involved in the production process, but without which its progress is impossible. For example, a building that houses many production shops. Hands do not grow out of the walls and begin to help the workers, but if there was no building, there would be no production either!

It happens, of course, that some material is produced outdoors, but this is the exception rather than the rule. In all other cases, real estate is the basis of production, its foundation.

Buildings and constructions- this is not an active part of non-current assets. Simply put, they are quite stable, little subject to reorganization. The maximum that is provided for them is scheduled repairs, and reconstruction, if required by production plans.

Unlike buildings and structures, non-current assets such as machines, aggregates, equipment, technical accessories and engineering devices, are an active share of non-current assets. The equipment fleet of the uphill enterprise is constantly being updated, more and more powerful units are being supplied from abroad, and the old ones are being repaired, reconstructed and modernized as far as possible.

It is easier to imagine how these non-current assets take part in the production process, but still, they remain in their original form, without sacrificing their cogs and tongues for the sake of the final result. However, both buildings and units experience physical deterioration. It is this - the forces - they put into the product.

Non-current assets are constantly revalued, because due to depreciation their value decreases, and the cost of production, respectively, increases (everything comes from somewhere and goes somewhere: the “law of conservation of value”).

This phenomenon is called depreciation of fixed assets and, as you probably guessed, it can only apply to non-current assets.

So once again what applies to non-current assets:

• Buildings, structures, production facilities, workshops, warehouses, etc.;
• Machines, aggregates, power plants, machine tools, transport, fleet of vehicles as a whole;
• Also to non-current assets are long-term, reflected in the credit account of the enterprise;
• This also includes unfinished buildings and structures;
• Animals and perennial plantings;
• As well as other (intangible) assets that represent intellectual value.
  Simply put, this is knowledge and skills, and in business terms, this can include various patents and know-how (novelties in engineering and technology, for the implementation and sale of which the company has the exclusive right).

This is all that serves a person for several years, up to the “write-off”.

Since non-current assets "live" a long life, it is difficult to call them liquid. In other words , turnover of fixed assets, that is, turning them into money in case of need leaves much to be desired.

Some assets "lie" on the balance sheet of the enterprise as a dead weight, and sometimes no one is in a hurry to write them off. Due to such costs, caused by the very essence of non-current assets, the balance sheet of the enterprise is kept in Russian rubles.

If there are no such problems: the fleet of vehicles has been updated, the newly built buildings sparkle with the brilliance of novelty, and nothing is “littered” in the warehouses, then, most likely, the enterprise operates according to standards close to European ones, and in its interests, so that the liquidity of all its assets was high. Then reporting can also be done in foreign currency: depending on which country the company has the most established relations with, it can be the euro or the dollar. All that is needed for this is to monitor exchange rates and place the greatest emphasis on the liquidity of non-current assets.

current assets

Their name speaks for itself: they are completely “turned around” in one (maximum two) production cycle.

The simplest example of current assets is these are all materials going to the conveyor: their life is short. Production, supply, (storage), processing. Current assets do not participate in any other production cycle. Unless, they will go for fertilizer or in some other process not related to production.

The volume of current assets on the balance sheet of the enterprise, one must think, is impressive. In order for the conveyors to work without stopping, and the labor process is not interrupted, there is always a stock of materials in the warehouses. However, there are also current assets that serve the production process for at least a year.

What are current assets:

• materials - the main current asset;
• of course, cash is the most liquid commodity;
• funds in accounts receivable (what third-party enterprises and organizations owe to this);
• goods already produced and stored in warehouses;
• goods already produced and delivered to the customer, but not yet paid for (when he pays for them, it will be cash);
• Services already provided but not yet paid for.

Non-current assets are shown in the 1st section of the balance sheet, and current assets in the 2nd section of the balance sheet, together they constitute the Balance Asset.

Current assets are also presented on a number of accounting accounts. This is a very structured system, which is convenient to track the movement of tangible and intangible assets.

In order to analyze the current state of the company, you will need to display an analytical balance sheet. Using the data contained in it (current and non-current assets, profit, costs, etc.), it is possible to determine the main factors hindering the achievement high level profitability or vice versa - increasing it.

Profitability ratios are considered to be the most important financial analysis tool. This is entirely justified. Comparison of profits with advanced costs / investments allows us to give a fairly accurate assessment of the solvency, and therefore, the investment attractiveness of the enterprise.

Return on assets / CRA (mobile and immobilized funds) is the first thing that professionals pay attention to. Their ratio shows to what extent the invested funds pay off, that is, what profit each spent monetary unit brings.

Business performance analysis should answer questions regarding: the current financial condition and its dynamics, market stability, solvency, total property value, solvency, amount of funds (own and borrowed).

Only an integrated approach will give an understanding of the reality and development prospects.

Non-current assets: slowly but surely

Non-current assets / VA (immobilized) - funds that do not take part in the production processes of the enterprise. However, in their absence, the enterprise is unlikely to be able to exist. Non-current assets include:

• R&D results;
• intangible assets;
• perennial plantings and animals;
• fixed assets (equipment, buildings, etc.);
• Deferred tax assets;
• long term financial investment.

In simple terms, VA is a building with production workshops and warehouses or a land plot on which it stands. Such objects are stable, therefore they belong to the category of inactive VA.

This is due to the fact that they are little subject to reorganization (maximum, repair, redevelopment or reconstruction work). In turn, the category of active VA is characterized by low stability:

• equipment;
• cars;
• engineering devices;
• aggregates;
• technical accessories.

The fleet of equipment is updated quite often due to the greater susceptibility to wear and tear (both physical and moral). Many will have a question - the equipment is directly involved in the manufacture of a particular product / creation of a service.

Why is it referred to as VA? Of course, this opinion is partly true. However, the technique, being involved in the production process, does not “disappear” upon reaching the final result, but remains in its original form. That is, “forces” are invested in the product.

Not everyone is familiar with the concept of “refinancing rate”. However, anyone can experience it. Here we will look at what it is and how to calculate interest on the refinancing rate.

Current assets: quickly, but effectively

Current assets / OA (mobile) - funds used in the production process at the same time. These include:

• short-term accounts receivable;
• raw materials and semi-finished products;
• money;
• VAT on purchased goods;
• transferred to the customer, but not paid for products;
• reserves;
• goods manufactured and kept in storage;
• financial investments (up to 1 year);
• services provided for which payment has not yet been received;

Without OA, the normal operation of the company is hardly possible. After all, they directly provide the production process, actually passing through the “conveyor line” (supply, processing, manufacturing, storage).

It is for the continuity of the cycle that their stocks in warehouses are, as a rule, impressive.

What is the difference between current assets and non-current assets

Let us consider in more detail the differences between current assets and non-current assets:

1. Maturity. VA is long term. You can use them from 1 year until the moment of "decommissioning". OA is short term. Their turnover is only 1-2 cycles.
2. Liquidity. VAs are mostly illiquid. This is due to their long lifespan. If you try to turn them into money after use, it is unlikely that you will get a large amount (with the exception of objects real estate). OA are liquid (especially money).
3. Depreciation. VA is often overrated. This is due to a decrease in their price as they wear out, despite the increase in the cost of production. This phenomenon is called OS depreciation. It belongs exclusively to VA.
4. Recoil. VA transfer their cost of manufactured products in parts, OA - in full.
5. Lending. VAs need a long-term investment, so they are usually purchased at the expense of the OS. OA quickly pays for itself. For companies whose capital structure is dominated by the latter, it is much easier to attract loans.
6. Location in financial documents. VA are reflected in the 1st section of the Balance, OA - in the second.
7. Specificity. The presence of a particular group of assets may be due to the specialization of the company. A high proportion of VA is present in capital-intensive companies (for example, telecommunications). Trade enterprises and material-intensive industries are distinguished by a large supply of OA.

Ratio of current and non-current assets

The ratio of VA and OA allows you to assess the financial stability of the company, demonstrating the structure of assets.

The indicator is calculated according to the formula based on the data from the Balance (Form No. 1):

K o / c \u003d OA (p. 290) / VA (190)

If the result is a number greater than one, then OA dominates, less - BA.

The calculation of the coefficient should be carried out on the basis of the aggregated balance sheet, that is, on the basis of the summation of assets from the beginning to the end of the reporting period (year).

Coefficient calculation

Suppose the balance sheet of the enterprise contains the data shown in the table:

The value of the coefficient at a level less than 1 allows us to assert the predominance of VA in the enterprise. At the same time, a slight increase in OA is observed. However, there is no need to talk about serious changes in the capital structure.

Fixed assets- these are assets, the term of use (repayment) of which is more than one year. The total amount of the company's assets consists of non-current and current assets. Accordingly, non-current assets are one of the two sections of the Balance Sheet Asset.

Composition of non-current assets

Non-current assets include:

• research and development results;
• fixed assets;
• financial investments, the return of which is expected not earlier than in a year;
• Deferred tax assets;
• other assets with signs of non-current assets.

In fact, non-current assets include labor instruments (machines and equipment) that are consumed in the process of use not at once (as materials), but over a long period, and liabilities receivable no earlier than 12 months later.

By the ratio of the share of current and non-current assets, one can judge the nature of production. So, capital-intensive enterprises (for example, telecommunications) are characterized by a large share of non-current assets, and material-intensive (or commodity-intensive, like trade) - a small one.

Analysis of non-current assets

Non-current assets require long-term investments, so the sources of their acquisition should be mainly the organization's own capital, and partly long-term borrowed funds. Therefore, the more capital-intensive production, the greater should be the share of equity in the sources of financing of the enterprise.

Non-current assets have less liquidity than current assets, i.e., they are more difficult to sell by converting them into cash. In general, liquidity, as one of the indicators of financial stability, depends on the structure of the enterprise's assets and the sources from which their purchase was financed (see all liquidity ratios in).

It should be noted that the maturity of an asset is not always a sign for classifying an asset as a current or non-current asset. The liquidity of the asset also plays a role. For example, one that is due in 2 years would normally be treated as a non-current asset. However, the organization's confidence in the ability to sell it without loss at any time before this date may be the reason for attributing receivables to current assets.

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