Business, Economics, Accounting and Finance
Types of Assets (Finance)
What you could expect from a balance sheet.
  • entity
    • company
    • partnership
    • trust
  • Balance Sheet
    • Asset: a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit.
      • Intangible assets: economic resources that have no physical presence.
        • patents
        • trademarks
        • copyrights
        • goodwill
      • Current Assets: short-term economic resources that are expected to be converted into cash within one year.
        • cash
        • cash equivalents
        • accounts receivable
        • inventory
        • prepaid expenses
      • Fixed Assets: long-term resources, such as plants, equipment, and buildings.
      • Financial Assets: represent investments in the assets and securities of other institutions.
        • Alias
          • When treated as something owned: “Financial Assets” – assets that can be traded.
          • When treated as something exchanged: “Financial Instruments” – monetary contracts between parties.
          • https://marketbusinessnews.com/financial-glossary/financial-instrument/
        • Types
        • Classifications
          • by how they are valued
            • Cash instruments are instruments that the markets value directly
              • Others
                • debt-based
                  • Short-term
                    • certificates of deposit (CDs)
                    • Deposits
                  • Long-term
                    • Loans
                • Foreign Exchange Instruments
                  • Spot foreign exchange
              • Securities: a thing deposited or pledged as a guarantee of the fulfillment of an undertaking or the repayment of a loan, to be forfeited in case of default.
                • Classified by nature
                  • Equity security (“stocks”): represents shareholders’ ownership interest in an entity.
                    • common stock
                    • preferred stock (preferred equity)
                  • Debt security: represents money that is borrowed and must be repaid, with terms that stipulates the size of the loan, interest rate and maturity or renewal date.
                    • collateralized securities
                      • as “securities”
                        • Asset-backed security (ABS): pools assets; resells them to investors.
                          • (Usually we mean non-mortgage assets)
                        • Mortgage-backed security (MBS): assets are mortgage(s).
                          • (Technically a kind of ABS.)
                      • as “structured products” (as in structured finance)
                        • Collateralized debt obligation (CDO): pools together cash flow-generating assets and repackages this asset pool into discrete tranches that can be sold to investors.
                        • Collateralized mortgage obligation (CMO): contains a pool of mortgages bundled together and sold as an investment.
                    • Short-term
                      • bills
                        • T-bills
                        • Commercial paper
                    • Long-term
                      • Bonds
                        • government bonds
                        • Corporate bonds
                  • Hybrid security
                • Marketable securities: to be sold or redeemed within a year -> can be easily converted to cash.
            • Derivative instruments (“derivatives”) are instruments whose worth we derive from the value and characteristics of at least one underlying entity.
              • Classified by whether their trading happens at exchanges
                • Exchange-traded derivatives (ETD): traded via exchanges
                  • debt-based
                    • Long-term
                      • Bond futures
                      • Options on bond futures
                    • Short-term
                      • Short-term interest rate futures
                  • equity-based
                    • Stock options
                    • Equity futures
                  • Foreign exchange instruments
                    • Currency futures
                • Over-the-counter (OTC) derivatives: traded (and privately negotiated) directly between two parties, without going through an intermediary.
                  • debt-based
                    • Short-term
                      • Forward rate agreements
                    • Long-term
                      • Interest rate swaps
                      • Interest rate caps and floors
                      • Interest rate options
                      • Exotic derivatives
                  • equity-based
                    • Stock options
                    • Exotic derivatives
                  • Foreign exchange instruments
                    • Foreign exchange options
                    • Outright forwards
                    • Foreign exchange swaps
                    • Currency swaps
              • Types
                • option is a contract which gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price prior to or on a specified date, depending on the form of the option.
          • by asset classes
            • debt-based: reflect a loan the investor made to the issuing entity
              • Short-term
              • Long-term
            • equity-based: reflect ownership of the issuing entity
              • Securities under equity-based financial instruments are stocks
            • Neither:
              • Transactions
              • Foreign Exchange Instruments
    • Liability
      • ...
      • certain Derivatives
      • Upcoming Payroll
      • Bonuses
      • Contracts
      • Debt: an amount borrowed
        • bank loans
        • bonds
          • corporate bonds
          • government bonds
      • (Certain Types Of) Leases
      • Legal Settlements
      • Payments To Vendors
      • Required Stock Redemptions
Last modified 2yr ago
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