On the classified balance sheet, the assets are listed in sections: Current Assets, Long-term Investments, PP&E, Intangible Assets, and Other Assets. Do all of these need to be in order of liquidity?
For example, does it matter if Land is before Buildings and Equipment in the PP&E section?
Or that Cash surrender value of life insurance is before Land held for future use?
Also, is there any order for the liabilities section? Is it alright to just put it in order of largest to smallest?
Solution
while we recording assets, we always write liquid assets first, and illiquid assets next and nominal assets later. means liquid assets like cash, prepaid expenses, receivables, and any short term receivables should write first, later all fixed assets and later intangible assets and any contingent assets.
even in liabilities we should start with long term liability, that is equity, preference, any other debt, and next all current liabilities. the earliest payment should be write as last item of liability and so on.
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Beyond the EU: DORA and NIS 2 Directive's Global Impact
On the classified balance sheet- the assets are listed in sections- Cu.docx
1. On the classified balance sheet, the assets are listed in sections: Current Assets, Long-term
Investments, PP&E, Intangible Assets, and Other Assets. Do all of these need to be in order of
liquidity?
For example, does it matter if Land is before Buildings and Equipment in the PP&E section?
Or that Cash surrender value of life insurance is before Land held for future use?
Also, is there any order for the liabilities section? Is it alright to just put it in order of largest to
smallest?
Solution
while we recording assets, we always write liquid assets first, and illiquid assets next and
nominal assets later. means liquid assets like cash, prepaid expenses, receivables, and any short
term receivables should write first, later all fixed assets and later intangible assets and any
contingent assets.
even in liabilities we should start with long term liability, that is equity, preference, any other
debt, and next all current liabilities. the earliest payment should be write as last item of liability
and so on.
