Investments

Accounting Terms Dictionary

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Investments

Investments are assets listed on the balance sheet. Investments are long term assets that are not part of plant, property, and equipment.

If the company was short on funds they could sell an investment without affecting operating income. For example, if a manufacturer owned a vacant lot, they could sell it without changing the revenue they took in from making their product. They could not sell the land the factory sits on or they would have no place of business and no way to make money. Therefore the land underneath the factory is part of plant, property, and equipment but the vacant lot is an investment.

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