Write a synopsis on the fixed assets in the balance sheet and explain how these relate to some of the assets in your immediate workplace ,with reference to the depreciation of and investment assets indicated.
Synopsis:
Fixed assets are long-term assets that are essential for a business's operations and are not meant for immediate sale. They include tangible assets such as property, buildings, machinery, furniture, and vehicles, as well as intangible assets like patents, copyrights, and trademarks. Fixed assets are listed on the balance sheet and are essential for a company's productivity and growth.
In my immediate workplace, we have several fixed assets that contribute to our daily operations. These assets include office furniture, computer systems, specialized machinery, and vehicles. The office furniture provides a comfortable and productive environment for employees, while computer systems enable us to perform various tasks efficiently. The specialized machinery is crucial for our manufacturing processes, enhancing our productivity and quality control measures. Additionally, the vehicles are used for transportation, delivering products, and attending business meetings, ensuring smooth operations.
As fixed assets are long-term investments, they also have a depreciation value attached to them. Depreciation is the gradual decrease in the value of an asset over its useful lifespan. This decrease is accounted for in the financial statements to reflect the asset's declining value accurately. In practice, this is done by allocating a portion of the asset's total cost as an expense each accounting period. Depreciation helps organizations track the wear and tear or obsolescence of fixed assets over time and plan for their replacement or upgrade.
In our workplace, we regularly assess the depreciation of our fixed assets to ensure that they are still operational and meeting our requirements. For example, computer systems may require regular upgrades or replacements to keep up with the latest technology and software requirements. Similarly, vehicles may experience wear and tear, leading to diminished efficiency or increased maintenance costs. By considering the depreciation of fixed assets, we can make informed decisions about when to replace or upgrade them.
Investment assets can also be indicated on the balance sheet alongside fixed assets. Investment assets refer to long-term investments made by the company in securities, stocks, bonds, or real estate, aimed at generating income or increasing capital appreciation. While fixed assets are primarily used for the company's operations, investment assets are acquired to improve the company's financial position through investment returns.
In conclusion, fixed assets play a vital role in the workplace by facilitating efficient operations and supporting productive activities. Assessing the depreciation of fixed assets helps in maintaining operational efficiency and planning for replacements or upgrades. Alongside fixed assets, investment assets can be indicated on the balance sheet, further contributing to the company's financial position and growth strategies.