fac1502 notes 2022

ASSETS – LIABILITIES = NET ASSET VALUE EQUITY = NET ASSET VALUE Assets: Defined as a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. Item can be classified as an asset only if it has been acquired by the entity as a result of past events. Assets are therefore the possessions of the entity. Assets can be classified as non-current when they:  Were not acquired for the main purpose of resale;  Are to be used in the business;  Have a lifespan of longer than twelve months. Examples of non-current assets:  Land and buildings;  Furniture and equipment;  Vehicles;  Financial assets Asset shall be classified as current when it satisfies any of the following criteria:  It is intended for sale or consumption in the entity’s normal operating cycle;  Held primarily for the purpose of being traded;  Expected to be realised within twelve months after the reporting period;  Cash or cash equivalent unless it is restricted from being exchanged for at least twelve months after the reporting period.