Financial And Non-Financial Assets

Course : Managerial Finance Lecture : Marc Credit Hours : 3 Credits Semester Sessions : 3 Semester, 2021/2022 Session Prepared By : Kenzo LECTURE NOTES Financial and Non-Financial Assets Investment is basically related to planting funds into various alternatives. Investment terms have two interrelated meanings. In economic theory in general generally interpreted as investment in the form of capital goods real. Meanwhile, the term investment in finance is connected by investing funds in the form of securities or which equates to that. Therefore investment can carried out in the form of assets (financial assets) and non-assets financial (nonfinancial assets). Financial assets can be defined as follows: It is a claim against the income or wealth of a business firm, household, or unit of government, represented usually by a certificate, receipt or other legal document ang usually created by the lending of money (Peter S. Rose, 1997). 1. Characteristics of Financial Assets Several characteristics of financial assets can be mentioned differentiate non-financial assets as follows: a. Does not provide a continuous service to owner such as a house, car, or machine wash. b. Promises an income that will come. c. Can be used as a tool for storing money. d. It cannot be depreciated because it is not used up. e. Physical condition cannot be assessed to determine value the market. f. Generally in the form of a piece of paper (certificate) or in the form of information stored in a computer (scriptless stocks) so that as a commodity its value can be said to be There isn't any. g. Transportation or storage costs are relatively very low. h. Very easy to transfer into other assets. 2. Types of Financial Assets Financial assets are numerous, but at... Basically, it can be grouped into several types or categories as follows. a) Cash (cash). Any acceptable financial asset as payment for purchasing goods and services referred to as money, for example paper money or metal owned and used as a means of payment is categorized as a financial asset. b) Savings in banks, for example: current accounts, time deposits, savings. These financial assets can be categorized as monetary claims that are very easy to cash out. c) Equity or shares, which is evidence direct ownership of a company, which gives the right to claim the company's profits and the right to receive a share of payments on asset sales company. In this case, shares are differentiated between shares ordinary and preferred shares. d) Debt securities, namely all securities owned by the nature of the debt. e) Investment units or mutual fund share units (investment funds) which is not proof of direct ownership a company. f) Derivative instruments (derivative instruments). This instrument is the most advanced financial market instrument. The characteristics of this instrument are unique Its market value is greatly influenced by the value of the instrument related – for example bonds and shares. Derivative instruments including warrants, rights, options, and future contacts. Even though the types of financial assets are very diverse, Basically it can be divided into several categories: a. Money b. Share c. Money instruments d. Contingent claims 3. Non-Financial Assets Meanwhile, investing is: allocate funds in the real sector (real assets) outside of assets financial. The main characteristic of non-financial assets is that they are lacking liquid compared to financial assets. Assets that can classified as non-financial assets include real assets estate, gemstones, precious metals, and valuable collectibles.