Current Assets versus Long Term Assets
The current assets in the balance sheet of Wal-Mart include cash and cash equivalent, receivables, inventories, prepaid expenses. On the other hand, the long-term assets of Wal-Mart incorporate property and property equipment, goodwill and property under capital leases.
Assets that are readily convertible into cash without losing their value are classified as current assets. Conversely, certain assets are not highly liquid and are not readily convertible into cash and hence, they are classified as non-current assets.
The cash and cash equivalent, receivables, inventories and prepaid expenses are classified as current assets because these items are sold, loaned out or consumed to generate income within the period of one year of the balance sheet’s date. Also, the current assets are kept apart from other resources because the company is dependent on its current assets to finance regular operations and pay expenses that are current. On the other hand, property and property equipment, goodwill and property under capital leases are classified as long-term assets of Wal-Mart because these assets are not anticipated to be transferred into cash or to be used within the period of one year of the balance sheet date. The non-current assets of a company can be categorized under three headings namely fixed assets, long-term investments and intangible assets (Walmart, 2014).
Categories of Assets
The balance sheet of Wal-Mart is categorized under two headings mainly current assets and non-current assets. The current assets of Wal-Mart comprise of all those items that anticipated the conversion into cash within the period of one year. In contrast, non- current assets include items that are not likely to be turned into cash within the period of one year of the balance sheet (Wahlen et al., 2014).
Review of Balance Sheet’s Footnotes
The footnotes related to the balance sheet of Wal-Mart include cash, and cash equivalent, receivables, inventories, property and equipment, long-lived assets and goodwill.
List of References
Wahlen, J., Baginski, S. & Bradshaw, M., 2014. Financial Reporting, Financial Statement Analysis and Valuation. Mason: Cengage Learning.
Walmart, 2014. Annual Report. Walmart.
