Financial assets are a company’s most liquid resources, easily convertible into known amounts of cash, and include cash, short-term investments (marketable securities), and receivables (accounts and notes). They are critical for operations, such as paying bills or purchasing inventory, as seen with Apple Inc., where financial assets exceed $300 billion (over 80% of its $375 billion total assets). In the balance sheet, financial assets are reported at their current value, which varies by type:
Valued at face amount (e.g., coins, checks, money market funds maturing within 90 days), listed first due to highest liquidity.
Valued at fair market value, reflecting daily fluctuations (e.g., stock prices), an exception to the cost principle.
Valued at net realizable value, the estimated collectible amount after adjusting for uncollectible accounts or returns.