Total Assets Formula

What is Total Assets Formula?

Assets are defined as resources owned by the company from which future economic benefits are expected to be generated. Total assets are the sum of non-current and current assets, and this total should equal the sum of stockholders’ equity and total liabilities combined.

The formula for Total Asset is:

Total Assets = Non Current Assets + Current Assets
Total-Assets-Formula

Note:

Examples of Total Assets Formula (with Excel Template)

Let’s see some simple to advanced examples of total assets equationAssets EquationTotal Assets is the aggregate of liabilities and shareholder funds. It can also be computed by combining current and noncurrent assets.read more to understand it better.

You can download this Total Assets Formula Excel Template here – Total Assets Formula Excel Template

Example # 1

The following are the asset details of a small manufacturing company for the year ended 31st March 2019.

  • Land = Rs.10,00,000
  • Machinery = Rs.5,00,000
  • Buildings = Rs.6,00,000
  • Sundry Debtors = Rs.2,00,000
  • Inventory = Rs.3,50,000
  • Cash & Bank = Rs.1,00,000

Solution:

Use the following data for the calculation of total assets.

Total Assets Formula Example 1

So, the calculation of total assets can be done as follows –

Example 1.1

Total Assets = Land + Buildings + Machinery + Inventory + Sundry Debtors + Cash & Bank

Total Assets = 1000000+600000+500000+350000+200000+100000

In the above total assets formula, non-current assets are Land, Buildings & Machinery, otherwise known as fixed assetsFixed AssetsFixed assets are assets that are held for the long term and are not expected to be converted into cash in a short period of time. Plant and machinery, land and buildings, furniture, computers, copyright, and vehicles are all examples.read more.

Total Assets will be –

Total Assets Formula Example 1.2

Total Assets = 2750000

Hence, the total assetsTotal AssetsTotal Assets is the sum of a company's current and noncurrent assets. Total assets also equals to the sum of total liabilities and total shareholder funds. Total Assets = Liabilities + Shareholder Equityread more would be calculated as Rs. 27,50,000.

Example # 2

The following are the asset details of a medium-sized company for the year ended 31st March 2019.

  • Land = Rs.20,00,000
  • Inventory = Rs. 40,00,000
  • Buildings = Rs.60,00,000
  • Sundry Debtors = Rs. 30,00,000
  • Vehicles = Rs.22,00,000
  • Cash & Bank = Rs. 25,00,000

Solution:

Note:

So, the calculation of total assets can be done as follows –

Total Assets Formula Example 2.0.1

Total Assets = Land + Buildings – Acc. Depreciation on BuildingsDepreciation On BuildingsDepreciation of building refers to reducing the recorded cost of a building until the value of the structure either becomes zero or reaches its salvage value. In addition, it helps to map the revenue in the form of lease rental generated during the corresponding expenses.read more + Vehicles – Acc. Depreciation on Vehicles + Machinery – Acc. Depreciation on Machinery + Inventory + Sundry Debtors + Cash & Bank

Total Assets = 2000000+6000000-2000000+2200000-600000+1500000-350000+4000000+3000000+2500000

Total Assets will be –

Example 2.0.2

Total Assets = 18250000

Hence, the total assetsTotal AssetsTotal Assets is the sum of a company's current and noncurrent assets. Total assets also equals to the sum of total liabilities and total shareholder funds. Total Assets = Liabilities + Shareholder Equityread more would be calculated as Rs. 1,82,50,000.

In this example, we are observing the concept of Gross vs. Net Book ValueNet Book ValueNet book value refers to the carrying value of the corporate assets acquired after accounting for depreciation, as reported in the company's balance sheet. An asset's net book value is calculated as "Net Book Value = Original Purchase Cost – Accumulated Depreciation".read more. While calculating total assets, it is important to note that the fixed assets should be stated at Net Value (Gross Value – Accumulated depreciation). It is assumed that the building, vehicle and machinery value provided is gross (at cost).

Hence, In the above total assets equation – Accumulated depreciation(Building, Vehicles, machinery) are subtracted from the gross value.

Example # 3

The following are the asset details of a large company for the year ended 31st March 2019.

  • Land =Rs.5,00,000
  • Inventory =Rs. 50,00,000
  • Buildings =Rs.70,00,000
  • Sundry Debtors =Rs. 20,00,000
  • Vehicles =Rs.12,00,000
  • Cash & Bank =Rs. 32,00,000
  • Furniture =Rs.40,00,000
  • Prepaid Expenses =Rs. 10,00,000
  • Bills Receivable =Rs.15,00,000
  • Bad Debts Provision =Rs. 1,50,000

So, the calculation of total assets can be done as follows –

Example 3.1

Total Assets = Land + Buildings + Vehicles + Furniture + Bills Receivable + Inventory + Prepaid Expenses + Sundry Debtors – Bad Debts ProvisionBad Debts ProvisionA bad debt provision refers to the reserve made by a company to set aside an amount computed as a specific percentage of overall doubtful or bad debts that has to be written off in the next year.read more + Cash & Bank

Total Assets = 500000+7000000+1200000+4000000+1500000+5000000+1000000+2000000+3200000-150000

Total Assets will be –

Total Assets Formula Example 3.3

In the above total assets equation, current assets are Bills Receivable, Inventory, Prepaid ExpensePrepaid ExpensePrepaid expenses are expenses for which the company paid in advance in an accounting period but which were not used in the same accounting period and have yet to be recorded in the company's books of accounts.read more, Sundry Debtors, and Cash & Bank.

Total Assets = 25250000

Hence, the total assetsTotal AssetsTotal Assets is the sum of a company's current and noncurrent assets. Total assets also equals to the sum of total liabilities and total shareholder funds. Total Assets = Liabilities + Shareholder Equityread more would be calculated as Rs. 2,52,50,000.

In the above example, it is important to note the following distinctive assets:-

Example # 4

The following are the asset details of a large manufacturing company for the year ended 31st March 2019.

  • Land = Rs20,00,000
  • Inventory = Rs. 40,00,000
  • Buildings = Rs60,00,000
  • Sundry Debtors = Rs. 30,00,000
  • Vehicles = Rs22,00,000
  • Cash & Bank = Rs. 25,00,000
  • Furniture = Rs15,00,000
  • Trademarks = Rs. 27,00,000
  • Investments = Rs40,00,000
  • Goodwill= Rs. 6,50,000
  • Machinery = Rs80,00,000

Note:

  • Accumulated Depreciation on Buildings = Rs. 20,00,000
  • Accumulated Depreciation on Vehicles = Rs. 6,00,000
  • Accumulated Depreciation on Machinery = Rs. 3,50,000
  • Furniture was purchased on the last day of the financial year.

Solution:

So, the formula of total assets and calculation can be done as follows –

Total Assets Formula Example 4.1

Total Assets = Land + Buildings – Acc. Depreciation on BuildingsDepreciation On BuildingsDepreciation of building refers to reducing the recorded cost of a building until the value of the structure either becomes zero or reaches its salvage value. In addition, it helps to map the revenue in the form of lease rental generated during the corresponding expenses.read more + Vehicles – Acc. Depreciation on Vehicles + Machinery – Acc. Depreciation on Machinery + Furniture + Investments + Trademarks + Goodwill + Inventory + Sundry Debtors + Cash & Bank

Total Assets = 2000000 + 6000000 + 2200000 +8000000 + 1500000 + 4000000 + 2700000 +650000 + 4000000 + 3000000 + 2500000 – 2000000 – 600000 – 3500000

Total Assets will be –

Example 4.2

Total Assets = 30450000

Hence, the total assetsTotal AssetsTotal Assets is the sum of a company's current and noncurrent assets. Total assets also equals to the sum of total liabilities and total shareholder funds. Total Assets = Liabilities + Shareholder Equityread more would be calculated as Rs. 3,04,50,000.

In the above example, it is important to note the following distinctive assets:-

Conclusion

The various types of assets can be categorized into Non-Current and Current. This would be dependent on their usage and significance to the operations of the company. Broadly, however, total assets are calculated by the summation of all value of current and non-current assets after adjusting for accumulated depreciation and any write-offWrite-offWrite off is the reduction in the value of the assets that were present in the books of accounts of the company on a particular period of time and are recorded as the accounting expense against the payment not received or the losses on the assets.read more or provision of receivables. Other variations are dependent on the applicability of accounting standards.

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