{"id":3790,"date":"2020-10-22T20:03:04","date_gmt":"2020-10-22T20:03:04","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&p=3790"},"modified":"2020-12-03T22:55:26","modified_gmt":"2020-12-03T22:55:26","slug":"putting-it-together-other-assets","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/putting-it-together-other-assets\/","title":{"raw":"Putting it Together: Other Assets","rendered":"Putting it Together: Other Assets"},"content":{"raw":"Remember that creating financial statements is like the scorecards of businesses, and we accountants are responsible for following the rules (GAAP) and creating an accurate picture of how the game is going. In addition, you are learning to read these complicated scorecards.\r\n\r\nFor instance, here is the income statement for ExxonMobile<\/a> for the fiscal year ended December 31, 2019:\r\n
\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
CONSOLIDATED STATEMENT OF INCOME (in millions of dollars)<\/em><\/caption>\r\n
<\/th>\r\nNote Reference Number<\/th>\r\n2019<\/th>\r\n2018<\/th>\r\n2017<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Subcategory, <\/span>Revenues and other income<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Sales and other operating revenue<\/td>\r\n<\/td>\r\n255,583<\/td>\r\n279,332<\/td>\r\n237,162<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Income from equity affiliates<\/td>\r\n7<\/td>\r\n5,441<\/td>\r\n7,355<\/td>\r\n5,380<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other income<\/td>\r\n<\/td>\r\n3,914<\/td>\r\n3,525<\/td>\r\n1,821<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total revenues and other income<\/td>\r\n<\/td>\r\nSingle Line<\/span>264,938Single Line<\/span><\/td>\r\nSingle Line<\/span>290,212Single Line<\/span><\/td>\r\nSingle Line<\/span>244,363Single Line<\/span><\/td>\r\n<\/tr>\r\n
Subcategory, <\/span>Costs and other deductions<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Crude oil and product purchases<\/td>\r\n<\/td>\r\n143,801<\/td>\r\n156,172<\/td>\r\n128,217<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Production and manufacturing expenses<\/td>\r\n<\/td>\r\n36,826<\/td>\r\n36,682<\/td>\r\n32,690<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Selling, general, and administrative expenses<\/td>\r\n<\/td>\r\n11,398<\/td>\r\n11,480<\/td>\r\n10,649<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Depreciation and depletion<\/td>\r\n9<\/td>\r\n18,998<\/td>\r\n18,745<\/td>\r\n19,893<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Exploration expenses, including dry holes<\/td>\r\n<\/td>\r\n1,269<\/td>\r\n1,466<\/td>\r\n1,790<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Non-service pension ad postretirement benefit expense<\/td>\r\n17<\/td>\r\n1,235<\/td>\r\n1,285<\/td>\r\n1,745<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Interest expense<\/td>\r\n<\/td>\r\n830<\/td>\r\n766<\/td>\r\n601<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other taxes and duties<\/td>\r\n19<\/td>\r\n30,525<\/td>\r\n32,663<\/td>\r\n30,104<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total costs and other deductions<\/td>\r\n<\/td>\r\nSingle Line<\/span>244,882Single Line<\/span><\/td>\r\nSingle Line<\/span>259,259Single Line<\/span><\/td>\r\nSingle Line<\/span>225,689Single Line<\/span><\/td>\r\n<\/tr>\r\n
Subcategory, <\/span>Income before income taxes<\/strong><\/td>\r\n<\/td>\r\n20,056<\/td>\r\n30,953<\/td>\r\n18,674<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Income taxes<\/td>\r\n19<\/td>\r\n5,282<\/td>\r\n9,532<\/td>\r\n(1,174)<\/td>\r\n<\/tr>\r\n
Subcategory, <\/span>Net income including noncontrolling interests<\/strong><\/td>\r\n<\/td>\r\nSingle Line<\/span>14,774<\/td>\r\nSingle Line<\/span>21,421<\/td>\r\nSingle Line<\/span>19,848<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Net income attributable to noncontrolling interests<\/td>\r\n<\/td>\r\n434<\/td>\r\n581<\/td>\r\n138<\/td>\r\n<\/tr>\r\n
Net income attributable to ExxonMobil<\/td>\r\n<\/td>\r\nSingle Line<\/span>14,340Double Line<\/span><\/td>\r\nSingle Line<\/span>20,840Double Line<\/span><\/td>\r\nSingle Line<\/span>19,710Double Line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\nAlready, you can see this is a consolidated statement, which means ExxonMobile over the years has purchased controlling interests in other companies and is rolling those financial results into one all-inclusive statement.\r\n\r\nAt the bottom of the income statement, you\u2019ll see the company has subtracted a portion of income from the consolidated subsidiaries that is attributable to other owners\u2014the noncontrolling interests. You can also see a line for depreciation and depletion\u2014two concepts that might not have meant anything to you until recently.\r\n\r\nOn the balance sheet, you can see a line for investments placed between current assets and PP&E, indicating those are available-for-sale investments being held long-term, along with long-term notes receivable, and you can see PP&E is being reported \u201cnet\u201d of accumulated depreciation and depletion.\r\n
\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
CONSOLIDATED BALANCE SHEET (in millions of dollars)<\/em><\/caption>\r\n
<\/th>\r\nNote Reference Number<\/th>\r\nDec. 31 2019<\/th>\r\nDec. 31 2018<\/th>\r\n<\/tr>\r\n<\/thead>\r\n
Subcategory, <\/span>Assets<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Subcategory, <\/span>Current assets<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Cash and cash equivalents<\/td>\r\n<\/td>\r\n3,089<\/td>\r\n3,042<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Notes and accounts receivable, less estimated doubtful amounts<\/td>\r\n6<\/td>\r\n26,966<\/td>\r\n24,701<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Subcategory, <\/span>Inventories<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Crude oil, products and merchandise<\/td>\r\n3<\/td>\r\n14,010<\/td>\r\n14,803<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Materials and supplies<\/td>\r\n<\/td>\r\n4,518<\/td>\r\n4,155<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other current assets<\/td>\r\n<\/td>\r\n1,469<\/td>\r\n1,272<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total current assets<\/td>\r\n<\/td>\r\nSingle Line<\/span>50,52<\/td>\r\nSingle Line<\/span>47,973<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Investments, advances, and long-term receivables<\/td>\r\n8<\/td>\r\n43,164<\/td>\r\n40,790<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Property, plant and equipment, at cost, less accumulated depreciation and depletion<\/td>\r\n9<\/td>\r\n253,018<\/td>\r\n247,101<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other assets, including intangibles, net<\/td>\r\n<\/td>\r\n16,363<\/td>\r\n10,332<\/td>\r\n<\/tr>\r\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total assets<\/td>\r\n<\/td>\r\nSingle Line<\/span>362,597Double Line<\/span><\/td>\r\nSingle Line<\/span>346,196Double Line<\/span><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\nYou would now know to scroll down to the footnotes to find out more information about accounting policies such as the methods used for depreciation and depletion, and details such as R&D expenditures and this breakdown of Investments:\r\n\r\n[caption id=\"attachment_6186\" align=\"aligncenter\" width=\"1024\"]\"See See the note long description<\/a> here.[\/caption]\r\n\r\nYou can now recognize the term \u201cequity method\u201d and you may also make the connection that the \u201creserves\u201d mentioned in connection with long-term receivables is an allowance for uncollectible accounts, and \u201cnet\u201d means that allowance has been subtracted from the \u201cgross\u201d amount which would be the maturity value of all the notes.\r\n\r\nIn other words, as you continue to explore these accounting concepts, more and more layers of the financial statement onion are being peeled back, and you are gaining more and more context with which to understand the layers to come.","rendered":"

Remember that creating financial statements is like the scorecards of businesses, and we accountants are responsible for following the rules (GAAP) and creating an accurate picture of how the game is going. In addition, you are learning to read these complicated scorecards.<\/p>\n

For instance, here is the income statement for ExxonMobile<\/a> for the fiscal year ended December 31, 2019:<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
CONSOLIDATED STATEMENT OF INCOME (in millions of dollars)<\/em><\/caption>\n
<\/th>\nNote Reference Number<\/th>\n2019<\/th>\n2018<\/th>\n2017<\/th>\n<\/tr>\n<\/thead>\n
Subcategory, <\/span>Revenues and other income<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Sales and other operating revenue<\/td>\n<\/td>\n255,583<\/td>\n279,332<\/td>\n237,162<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Income from equity affiliates<\/td>\n7<\/td>\n5,441<\/td>\n7,355<\/td>\n5,380<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other income<\/td>\n<\/td>\n3,914<\/td>\n3,525<\/td>\n1,821<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total revenues and other income<\/td>\n<\/td>\nSingle Line<\/span>264,938Single Line<\/span><\/td>\nSingle Line<\/span>290,212Single Line<\/span><\/td>\nSingle Line<\/span>244,363Single Line<\/span><\/td>\n<\/tr>\n
Subcategory, <\/span>Costs and other deductions<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Crude oil and product purchases<\/td>\n<\/td>\n143,801<\/td>\n156,172<\/td>\n128,217<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Production and manufacturing expenses<\/td>\n<\/td>\n36,826<\/td>\n36,682<\/td>\n32,690<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Selling, general, and administrative expenses<\/td>\n<\/td>\n11,398<\/td>\n11,480<\/td>\n10,649<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Depreciation and depletion<\/td>\n9<\/td>\n18,998<\/td>\n18,745<\/td>\n19,893<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Exploration expenses, including dry holes<\/td>\n<\/td>\n1,269<\/td>\n1,466<\/td>\n1,790<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Non-service pension ad postretirement benefit expense<\/td>\n17<\/td>\n1,235<\/td>\n1,285<\/td>\n1,745<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Interest expense<\/td>\n<\/td>\n830<\/td>\n766<\/td>\n601<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other taxes and duties<\/td>\n19<\/td>\n30,525<\/td>\n32,663<\/td>\n30,104<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total costs and other deductions<\/td>\n<\/td>\nSingle Line<\/span>244,882Single Line<\/span><\/td>\nSingle Line<\/span>259,259Single Line<\/span><\/td>\nSingle Line<\/span>225,689Single Line<\/span><\/td>\n<\/tr>\n
Subcategory, <\/span>Income before income taxes<\/strong><\/td>\n<\/td>\n20,056<\/td>\n30,953<\/td>\n18,674<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Income taxes<\/td>\n19<\/td>\n5,282<\/td>\n9,532<\/td>\n(1,174)<\/td>\n<\/tr>\n
Subcategory, <\/span>Net income including noncontrolling interests<\/strong><\/td>\n<\/td>\nSingle Line<\/span>14,774<\/td>\nSingle Line<\/span>21,421<\/td>\nSingle Line<\/span>19,848<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Net income attributable to noncontrolling interests<\/td>\n<\/td>\n434<\/td>\n581<\/td>\n138<\/td>\n<\/tr>\n
Net income attributable to ExxonMobil<\/td>\n<\/td>\nSingle Line<\/span>14,340Double Line<\/span><\/td>\nSingle Line<\/span>20,840Double Line<\/span><\/td>\nSingle Line<\/span>19,710Double Line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

Already, you can see this is a consolidated statement, which means ExxonMobile over the years has purchased controlling interests in other companies and is rolling those financial results into one all-inclusive statement.<\/p>\n

At the bottom of the income statement, you\u2019ll see the company has subtracted a portion of income from the consolidated subsidiaries that is attributable to other owners\u2014the noncontrolling interests. You can also see a line for depreciation and depletion\u2014two concepts that might not have meant anything to you until recently.<\/p>\n

On the balance sheet, you can see a line for investments placed between current assets and PP&E, indicating those are available-for-sale investments being held long-term, along with long-term notes receivable, and you can see PP&E is being reported \u201cnet\u201d of accumulated depreciation and depletion.<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
CONSOLIDATED BALANCE SHEET (in millions of dollars)<\/em><\/caption>\n
<\/th>\nNote Reference Number<\/th>\nDec. 31 2019<\/th>\nDec. 31 2018<\/th>\n<\/tr>\n<\/thead>\n
Subcategory, <\/span>Assets<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Subcategory, <\/span>Current assets<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Cash and cash equivalents<\/td>\n<\/td>\n3,089<\/td>\n3,042<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Notes and accounts receivable, less estimated doubtful amounts<\/td>\n6<\/td>\n26,966<\/td>\n24,701<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Subcategory, <\/span>Inventories<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Crude oil, products and merchandise<\/td>\n3<\/td>\n14,010<\/td>\n14,803<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Materials and supplies<\/td>\n<\/td>\n4,518<\/td>\n4,155<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other current assets<\/td>\n<\/td>\n1,469<\/td>\n1,272<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total current assets<\/td>\n<\/td>\nSingle Line<\/span>50,52<\/td>\nSingle Line<\/span>47,973<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Investments, advances, and long-term receivables<\/td>\n8<\/td>\n43,164<\/td>\n40,790<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Property, plant and equipment, at cost, less accumulated depreciation and depletion<\/td>\n9<\/td>\n253,018<\/td>\n247,101<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Other assets, including intangibles, net<\/td>\n<\/td>\n16,363<\/td>\n10,332<\/td>\n<\/tr>\n
\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Total assets<\/td>\n<\/td>\nSingle Line<\/span>362,597Double Line<\/span><\/td>\nSingle Line<\/span>346,196Double Line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

You would now know to scroll down to the footnotes to find out more information about accounting policies such as the methods used for depreciation and depletion, and details such as R&D expenditures and this breakdown of Investments:<\/p>\n

\"See<\/p>\n

See the note long description<\/a> here.<\/p>\n<\/div>\n

You can now recognize the term \u201cequity method\u201d and you may also make the connection that the \u201creserves\u201d mentioned in connection with long-term receivables is an allowance for uncollectible accounts, and \u201cnet\u201d means that allowance has been subtracted from the \u201cgross\u201d amount which would be the maturity value of all the notes.<\/p>\n

In other words, as you continue to explore these accounting concepts, more and more layers of the financial statement onion are being peeled back, and you are gaining more and more context with which to understand the layers to come.<\/p>\n\n\t\t\t

\n\t\t\t

Candela Citations<\/h3>\n\t\t\t\t\t
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CC licensed content, Original<\/div>