Balance Sheet Classification Of Equity Investments

Investments are reported by the investor on its balance sheet and classified into current and non current portions.

Balance sheet classification of equity investments. Balance sheet classificationa balance sheet contains the following classifications a current assets g long term debt b investments h other noncurrent liabilities c property plant and equipment i capital stock d intangible assets j additional paid in capital e other noncurrent assets k retained earnings f current liabilitiesindicate by letter how each of the following. A classified balance sheet presents information about an entity s assets liabilities and shareholders equity that is aggregated or classified into subcategories of accounts it is extremely useful to include classifications since information is then organized into a format that is more readable than a simple listing of all the accounts that comprise a balance sheet. Investments are listed as assets but they re not all clumped together. Debt and equity investments classified as trading securities are those which were bought for the purpose of selling them within a short time of their purchase.

The balance sheet for your company shows your assets your liabilities and the owners equity. The ratios an investor can calculate from these valuations are important too. Overall the valuation of long term investment assets at each reporting cycle is an important factor in figuring a firm s worth on its balance sheet. The balance sheet classification of these investments as short term current or long term is based on their maturity dates.