🏗️ Asset Architecture

On a classified Balance Sheet, assets are grouped by liquidity and operational intent. Sort each asset account into Current Assets, Long-Term Investments, PPE, or Intangibles!

Lesson: The 4 Asset Categories

A classified Balance Sheet separates economic resources so readers can assess immediate solvency vs. productive capacity:

Asset Category	Lifespan & Purpose	Typical Accounts
Current Assets	Liquid within 1 year or the operating cycle.	Cash, Marketable Securities, Accounts Receivable, Inventory, Prepaid Expenses.
Long-Term Investments	Multi-year holding for appreciation or return; not used in operations.	5-Year Corporate Bonds, Land held for future speculation, Notes Receivable (>1 yr).
PPE (Fixed Assets)	Tangible productive assets used in daily business; depreciated over time.	Factory Land, Buildings, Delivery Vehicles, Equipment, (Less: Accumulated Depr.).
Intangible Assets	Valuable exclusive privileges & intellectual property lacking physical substance.	Patents, Copyrights, Trademarks, Franchises, Licenses, Goodwill.

The Classic Land Trap:
• Land with an active warehouse on it = PPE.
• Land held vacant for speculative price gain = Long-Term Investment!

🏗️ Asset Architecture

Architecture Completed!

Lesson: The 4 Asset Categories