What are Assets?

Learn about assets with Deewar

Case breakdown: Movie Deewar

Ravi and Vijay are brothers. If you watch this scene carefully Ravi (in a shirt is the Police officer) and  Vijay- (played by Amitabh Bachchan) (thief) are having a conversation regarding their assets.

What you need to understand is that Vijay defines Ravi’s assets as the following:

  1. Rs. 500 salary job,
  2. A hired quarter,
  3. A jeep and
  4. 2 pairs of police’s (Khaki) uniform.

(Well, that’s not so nice according to Vijay). While the assets that Vijay has and boasts about are the following:

  1. Car (Gadi in hindi),
  2. Building
  3. Property and
  4. Bank balance.

What are Assets?

Assets in business are quite similar. Assets are resources owned by a business. These resources earn money for the business in the future. Assets are divided into 3 sub heads:

  1. Current assets
  2. Fixed Assets/long- term assets
  3. Other assets

Current Assets are those that can be quickly converted into cash. They are short-term in nature. Hence bank balance (as AB mentions), cash in hand, accounts receivables etc are current assets.

 

Fixed Assets or non-current assets are long term in nature and cannot be converted into cash quickly. They could be furniture and fixtures, building & Property, machinery etc. [like AB mentions- Bangla (Penthouse), Gadi (Car)].

Assets can further be classified as:

  • Tangible
  • Intangible

Something that can be touched is tangible, while something that can’t be touched but is felt is intangible.

‘Mere pass Maa (Mother) hain’ [I have a mother] dialogue used by Ravi sounds more like goodwill. In accounts, Goodwill is a long term asset and is intangible in nature. It is generally shown on the assets side when the company makes any merger or acquisition. Hence it is more like an advantage to the business’s reputation.

Besides goodwill, there are other intangibles’ in business such as trademarks, copyrights, patents etc. SK uses ‘Maa’ as Goodwill. Though mother isn’t intangible, but ‘love of a mother’ (MAA ka Pyaar) is and that’s why this scene is so legendary.

P.S: One also needs to understand that the principles (Oosol and Aadarsh) that Ravi and AB are talking about are actually accounting principles ( GAAP and IFRS). It is amusing how comfortably these two men are talking about accounts.

Below is an example of assets in a business:

 

 

what are assets

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