How do we treat a long term investment in the B/S, does it go under fixed assets or under current assets?
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To determine how to treat a long-term investment on the balance sheet, we need to understand the nature of the investment and its intended holding period.
1. If the long-term investment is intended to be held for a period longer than one year or the normal operating cycle of the business (whichever is longer), it is typically categorized as a "fixed asset."
2. On the other hand, if the investment is expected to be disposed of within the next year or operating cycle, it would usually be classified as a "current asset."
It's important to note that accounting standards and practices may vary depending on the jurisdiction and the specific circumstances of the investment. Therefore, it is always recommended to consult with an accounting professional or refer to the specific accounting standards applicable in your country.
For more detailed and accurate information, you can refer to the guidance provided by the Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) applicable in your region. Additionally, your company's accounting policies and practices should also be taken into consideration.