What are Non-Cash Assets?

The financial success of any business relies heavily on cash flow statements. Cash flow statements are designed to show if and when you will have enough cash available to pay the bills of your business. Cash flow statements, income statements and balance sheets are collectively referred to as the “big three” in terms of financial reporting. In many cases, the end of a cash flow statement is normally the balance of the cash account; however, non-cash assets are also figured into the statement.

Non-Cash Assets

If you take a look at your balance sheet, you will notice that there are sections which show you the assets, liability and equity accounts. The assets portion of the sheet is subdivided into sections, including current and non-current assets. Current assets are assets which will soon convert to cash or expenses in the next twelve months, while non-current assets are fixed assets such as cars, buildings, warehouses, etc. and also investments.

Bank Holds

It is worth noting that banks will often put a hold on several large non-cash items depending on your account history. This time of holding is often referred to as the float. According to investopedia.com, this is the time during which banks have funds available to them.

Don’t Have Doubt

Many people choose not to touch non-cash assets until they fully understand the liability they present for them and their finances. If you are in doubt, or if you be unsure about taking on a cash asset, don’t have doubt. We have accountants available on our team to help you better understand cash assets and non-cash assets so you don’t make mistakes. Our accountants can help you understand cash assets and non-cash assets and also help you ensure that you’re actually organizing them effectively.

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