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The two main types of assets are current assets and non-current assets. These classifications are used to aggregate assets into different blocks on the balance sheet, so that one can discern the relative liquidity of the assets of an organization.

Current assets are expected to be consumed within one year, and commonly include the following line items:

Non-current assets are also known as long-term assets, and are expected to continue to be productive for a business for more than one year. The line items usually included in this classification are:

Tangible fixed assets (such as buildings, equipment, furniture, land, and vehicles)

Intangible fixed assets (such as patents, copyrights, and trademarks)

The classifications used to define assets change when viewed from an investment perspective. In this situation, there are growth assets and defensive assets. These types are used to differentiate between the manner in which investment income is generated from different types of assets.

Growth assets generate income for the holder from rents, appreciation in value, or dividends. The values of these assets can rise in value to generate a return for the holder, but there is a risk that their valuations can also decline. Examples of growth assets are:

Defensive assets generate income for the holder primarily from interest. The values of these assets tend to hold steady or can decline after the effects of inflation are considered, and so tend to be a more conservative form of investment. Examples of defensive assets are:

Assets may also be classified as tangible or intangible assets. Intangible assets lack physical substance, while tangible assets have the reverse characteristic. Most of an organization’s assets are usually classified as tangible assets. Examples of intangible assets are copyrights, patents, and trademarks. Examples of tangible assets are vehicles, buildings, and inventory.

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1. Open an account and fund it.

First, choose what kind of account you want to open, then fill out the application online. E*TRADE offers a number of different accounts, including:

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  • Brokerage accounts. You can establish a standard brokerage account, Coverdell Education Savings Account, or custodial account for the benefit of a minor.
  • Retirement accounts. Choices include traditional IRA , Roth IRA , or rollover IRA.
  • Managed portfolios. If you’re looking for fee-based professional investment management, E*TRADE offers four choices: Core Portfolios, Blend Portfolios, Dedicated Portfolios, and Fixed Income Portfolios.
  • Small business retirement accounts. These tax-advantaged retirement plans are designed for self-employed people, as well as small business owners and employees. Account types include Individual or Roth Individual 401(k), Simple IRA, SEP IRA, Profit-Sharing Plan, or Investment-Only (Non-Custodial) Account.

There are four ways to fund your E*TRADE account:

1. Transfer money online

This free service lets you move money between E*TRADE accounts and from outside financial institutions. Transfers take up to three business days.

2. Wire transfer

Transfers are typically completed on the same business day.

3. Transfer an account

Available for brokerage accounts only, this service transfers cash and securities from an account at another institution to E*TRADE. It takes 10 or more business days.

4. Mail a check

This method takes five business days.

2. Create an investing plan

E*TRADE suggests that a well-balanced investing plan should be based on five simple principles:

  • Diversification
  • Understanding risk & reward
  • Choosing the right investments
  • Rebalancing to stay on track
  • Sticking to your plan

How do you create a well-balanced plan? The E*TRADE website offers a number of tools and resources designed to help investors:

  • Analyze a portfolio
  • Create an asset allocation
  • Diversify a portfolio
  • Build a retirement plan
  • Learn more about investing and the markets

3. Find investment ideas.

Once you’ve completed your plan, the next step is to find the individual investments that match your plan and your goals. Here, E*TRADE provides:

  • A large selection of investment choices. You can choose from tens of thousands of stocks , exchange-traded funds (ETFs), mutual funds , bonds , options , and other investment vehicles.
  • Tools and screeners. These are tools designed to help you narrow down the vast number of potential investments and find specific choices that match your plan and the criteria that you set.
  • Market data. If you want to dig deeper into individual stocks or funds, you can get real-time price quotes, and use a range of customizable charts and risk management tools.
  • Free independent research. Access to recommendations and ratings from a variety of independent analysts is included with an E*TRADE account. These resources can be used to find potential investments or compare with your own ideas and research.

Investors have 24/7 access to screeners, charts, research and the the other E*TRADE tools, so you can do much of your investing activity on whatever schedule you prefer.

4. Execute your trades.

You enter orders using the E*TRADE online trading ticket, which provides a variety of order types. Your portfolio updates in real time, so you can immediately check the effect of your trades or of market changes.

You can also place trades using the E*TRADE app for iOS and Android, which supports basic trades, as well as advanced order types and even multi-leg options orders.

5. Monitor your accounts and assets.

When you log on, the Complete View page shows all your E*TRADE accounts and assets on one screen, providing an overview of all your investments. By clicking on individual items, you can dig deeper into the details of your accounts and the assets you hold, including performance over time, the latest news, and relevant analyst research.

You can also keep tabs on your accounts, or even manage your cash, when you’re on the move using the E*TRADE Mobile app.

6. Watch the markets.

E*TRADE provides tools and resources for keeping tabs on the markets or tracking individual stocks, bonds, and funds that aren’t currently in your portfolio. These include:

  • Watch lists. Using this tool, you can track the pricing, performance, and news related to investments you’re interested in. It’s even possible to create sample portfolios and watch how they perform.
  • Alerts. You can set alerts to notify you when a stock, fund, or other investment crosses a price threshold you specify.
  • Mobile alerts. These are notifications sent to your smartphone about pricing highs and lows, movements in the value of your portfolio, and changes to your account.
  • Market news and commentary. The E*TRADE platform provides access to multiple financial and business news sources, including live Bloomberg TV. 1 News is also available via E*TRADE Mobile.

7. Get help and guidance.

For fast answers, E*TRADE’s Online Service Center may be the best place to start. It includes FAQs, applications, and request forms, plus you can send a message directly to E*TRADE Customer Service.

E*TRADE also offers access to professional Financial Consultants who are available to provide help by phone, by email, or in person at an E*TRADE branch.

How can E*TRADE help?

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Earnings potentially grow tax-deferred until you withdraw them in retirement.

Personalized Investments

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Tap into professional money management from E*TRADE Capital Management. Choose from an array of customized managed portfolios to help meet your financial needs.

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Savings with high interest, FDIC insured up to $1,250,000

Earn 0.20% APY 2 (2x the national average 3 ) with no deposit required to open an account.

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Types of Assets

What Are the Main Types of Assets?

An asset is a resource owned or controlled by an individual, corporation Corporation A corporation is a legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. Corporations are allowed to enter into contracts, sue and be sued, own assets, remit federal and state taxes, and borrow money from financial institutions. , or government with the expectation that it will generate future cash flows. Common types of assets include: current, non-current, physical, intangible, operating, and non-operating. Correctly identifying and classifying the types of assets is critical to the survival of a company, specifically its solvency and associated risks.

The International Financial Reporting Standards (IFRS) framework defines an asset as follows: “An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise.”

Examples of assets include:

  • Cash and cash equivalents
  • Inventory Inventory Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated. It is often deemed the most illiquid of all current assets – thus, it is excluded from the numerator in the quick ratio calculation.
  • Investments
  • PPE (Property, Plant, and Equipment) PP&E (Property, Plant and Equipment) PP&E (Property, Plant, and Equipment) is one of the core non-current assets found on the balance sheet. PP&E is impacted by Capex, Depreciation, and Acquisitions/Dispositions of fixed assets. These assets play a key part in the financial planning and analysis of a company’s operations and future expenditures
  • Vehicles
  • Furniture
  • Patents (intangible asset)
  • Stock Stock What is a stock? An individual who owns stock in a company is called a shareholder and is eligible to claim part of the company’s residual assets and earnings (should the company ever be dissolved). The terms “stock”, “shares”, and “equity” are used interchangeably.

Properties of an Asset

There are three key properties of an asset:

  • Ownership: Assets represent ownership that can be eventually turned into cash and cash equivalents
  • Economic Value: Assets have economic value and can be exchanged or sold
  • Resource: Assets are resources that can be used to generate future economic benefits

Classification of Assets

Assets are generally classified in three ways:

  1. Convertibility: Classifying assets based on how easy it is to convert them into cash.
  2. Physical Existence: Classifying assets based on their physical existence (in other words, tangible vs. intangible assets).
  3. Usage: Classifying assets based on their business operation usage/purpose.

Classification of Assets: Convertibility

If assets are classified based on their convertibility into cash, assets are classified as either current assets or fixed assets. An alternative expression of this concept is short-term vs. long-term assets.

1. Current Assets

Current assets are assets that can be easily converted into cash and cash equivalents (typically within a year). Current assets are also termed liquid assets and examples of such are:

  • Cash
  • Cash equivalents
  • Short-term deposits
  • Stock
  • Marketable securities
  • Office supplies

2. Fixed or Non-Current Assets

Non-current assets are assets that cannot be easily and readily converted into cash and cash equivalents. Non-current assets are also termed fixed assets, long-term assets, or hard assets. Examples of non-current or fixed assets include:

Classification of Assets: Physical Existence

If assets are classified based on their physical existence, assets are classified as either tangible assets or intangible assets.

1. Tangible Assets

Tangible assets are assets that have a physical existence (we can touch, feel, and see them). Examples of tangible assets include:

  • Land
  • Building
  • Machinery
  • Equipment
  • Cash
  • Office supplies
  • Stock
  • Marketable securities

2. Intangible Assets

Intangible assets are assets that do not have a physical existence. Examples of intangible assets include:

  • Goodwill
  • Patents
  • Brand
  • Copyrights
  • Trademarks
  • Trade secrets
  • Permits
  • Corporate intellectual property

Classification of Assets: Usage

If assets are classified based on their usage or purpose, assets are classified as either operating assets or non-operating assets.

1. Operating Assets

Operating assets are assets that are required in the daily operation of a business. In other words, operating assets are used to generate revenue from a company’s core business activities. Examples of operating assets include:

  • Cash
  • Stock
  • Building
  • Machinery
  • Equipment
  • Patents
  • Copyrights
  • Goodwill

2. Non-Operating Assets:

Non-operating assets are assets that are not required for daily business operations but can still generate revenue. Examples of non-operating assets include:

  • Short-term investments
  • Marketable securities
  • Vacant land
  • Interest income from a fixed deposit

Importance of Asset Classification

Classifying assets is important to a business. For example, understanding which assets are current assets and which are fixed assets is important in understanding the net working capital of a company. In the scenario of a company in a high-risk industry, understanding which assets are tangible and intangible helps to assess its solvency and risk. Determining which assets are operating assets and which assets are non-operating assets is important to understanding the contribution of revenue from each asset, as well as in determining what percentage of a company’s revenues comes from its core business activities.

We hope you have enjoyed reading CFI’s guide to types of assets. Check out the following free CFI resources for more information.

  • Net Identifiable Assets Net Identifiable Assets Net Identifiable Assets consist of assets acquired from a company whose value can be measured, used in M&A for Goodwill and Purchase Price Allocation PPA
  • Marketable Securities Marketable Securities Marketable securities are unrestricted short-term financial instruments that are issued either for equity securities or for debt securities of a publicly listed company. The issuing company creates these instruments for the express purpose of raising funds to further finance business activities and expansion.
  • Projecting Balance Sheet Items Projecting Balance Sheet Line Items Projecting balance sheet line items involves analyzing working capital, PP&E, debt share capital and net income. This guide breaks down how to calculate
  • Analysis of Financial Statements Analysis of Financial Statements How to perform Analysis of Financial Statements. This guide will teach you to perform financial statement analysis of the income statement, balance sheet, and cash flow statement including margins, ratios, growth, liquiditiy, leverage, rates of return and profitability.
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