{"id":274,"date":"2024-09-06T16:48:11","date_gmt":"2024-09-06T16:48:11","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/putting-it-together-other-assets\/"},"modified":"2024-09-06T16:48:11","modified_gmt":"2024-09-06T16:48:11","slug":"putting-it-together-other-assets","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/putting-it-together-other-assets\/","title":{"raw":"Putting it Together: Other Assets","rendered":"Putting it Together: Other Assets"},"content":{"raw":"\nRemember 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.\n\nFor instance, here is the income statement for ExxonMobil<\/a> for the fiscal year ended December 31, 2019:\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
      Sales and other operating revenue<\/td>\n<\/td>\n255,583<\/td>\n279,332<\/td>\n237,162<\/td>\n<\/tr>\n
      Income from equity affiliates<\/td>\n7<\/td>\n5,441<\/td>\n7,355<\/td>\n5,380<\/td>\n<\/tr>\n
      Other income<\/td>\n<\/td>\n3,914<\/td>\n3,525<\/td>\n1,821<\/td>\n<\/tr>\n
            Total 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
      Crude oil and product purchases<\/td>\n<\/td>\n143,801<\/td>\n156,172<\/td>\n128,217<\/td>\n<\/tr>\n
      Production and manufacturing expenses<\/td>\n<\/td>\n36,826<\/td>\n36,682<\/td>\n32,690<\/td>\n<\/tr>\n
      Selling, general, and administrative expenses<\/td>\n<\/td>\n11,398<\/td>\n11,480<\/td>\n10,649<\/td>\n<\/tr>\n
      Depreciation and depletion<\/td>\n9<\/td>\n18,998<\/td>\n18,745<\/td>\n19,893<\/td>\n<\/tr>\n
      Exploration expenses, including dry holes<\/td>\n<\/td>\n1,269<\/td>\n1,466<\/td>\n1,790<\/td>\n<\/tr>\n
      Non-service pension ad postretirement benefit expense<\/td>\n17<\/td>\n1,235<\/td>\n1,285<\/td>\n1,745<\/td>\n<\/tr>\n
      Interest expense<\/td>\n<\/td>\n830<\/td>\n766<\/td>\n601<\/td>\n<\/tr>\n
      Other taxes and duties<\/td>\n19<\/td>\n30,525<\/td>\n32,663<\/td>\n30,104<\/td>\n<\/tr>\n
            Total 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
      Income 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
      Net 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>\nAlready, you can see this is a consolidated statement, which means ExxonMobil over the years has purchased controlling interests in other companies and is rolling those financial results into one all-inclusive statement.\n\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.\n\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.\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
      Subcategory, <\/span>Current assets<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            Cash and cash equivalents<\/td>\n<\/td>\n3,089<\/td>\n3,042<\/td>\n<\/tr>\n
            Notes and accounts receivable, less estimated doubtful amounts<\/td>\n6<\/td>\n26,966<\/td>\n24,701<\/td>\n<\/tr>\n
            Subcategory, <\/span>Inventories<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
                  Crude oil, products and merchandise<\/td>\n3<\/td>\n14,010<\/td>\n14,803<\/td>\n<\/tr>\n
                  Materials and supplies<\/td>\n<\/td>\n4,518<\/td>\n4,155<\/td>\n<\/tr>\n
            Other current assets<\/td>\n<\/td>\n1,469<\/td>\n1,272<\/td>\n<\/tr>\n
                  Total current assets<\/td>\n<\/td>\nSingle Line<\/span>50,52<\/td>\nSingle Line<\/span>47,973<\/td>\n<\/tr>\n
      Investments, advances, and long-term receivables<\/td>\n8<\/td>\n43,164<\/td>\n40,790<\/td>\n<\/tr>\n
      Property, plant and equipment, at cost, less accumulated depreciation and depletion<\/td>\n9<\/td>\n253,018<\/td>\n247,101<\/td>\n<\/tr>\n
      Other assets, including intangibles, net<\/td>\n<\/td>\n16,363<\/td>\n10,332<\/td>\n<\/tr>\n
            Total 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>\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:\n\nLong-term receivables and miscellaneous, net of reserves of $5,643 million and $5,471 million5,1415,590\n\n\n\n\n\n\n\n\n\n\n\n\n\n
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<\/th>\n<\/tr>\n
8. Investments, Advances, and Long-Term Receivables<\/th>\n<\/tr>\n
Description <\/span><\/th>\nDec. 31, 2019<\/th>\nDec. 31, 2018<\/th>\n<\/tr>\n<\/thead>\n
<\/td>\n(millions of dollars)<\/em><\/td>\n<\/tr>\n
Subcategory, <\/span>Equity method company investments and advances<\/td>\n<\/tr>\n
     Investments<\/td>\n29,291<\/td>\n26,382<\/td>\n<\/tr>\n
     Advances<\/td>\n8,542<\/td>\n8,608<\/td>\n<\/tr>\n
            Total equity method company investments and advances<\/td>\nSingle line<\/span>\n37,833<\/td>\nSingle line<\/span>\n34,990<\/td>\n<\/tr>\n
Equity securities carried at fair value and other investments at adjusted cost basis<\/td>\n190<\/td>\n210<\/td>\n<\/tr>\n
            Total<\/td>\nSingle line<\/span>\n43,164Double line<\/span><\/td>\nSingle line<\/span>\n40,790Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \n\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.\n\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.\n","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 ExxonMobil<\/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
      Sales and other operating revenue<\/td>\n<\/td>\n255,583<\/td>\n279,332<\/td>\n237,162<\/td>\n<\/tr>\n
      Income from equity affiliates<\/td>\n7<\/td>\n5,441<\/td>\n7,355<\/td>\n5,380<\/td>\n<\/tr>\n
      Other income<\/td>\n<\/td>\n3,914<\/td>\n3,525<\/td>\n1,821<\/td>\n<\/tr>\n
            Total 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
      Crude oil and product purchases<\/td>\n<\/td>\n143,801<\/td>\n156,172<\/td>\n128,217<\/td>\n<\/tr>\n
      Production and manufacturing expenses<\/td>\n<\/td>\n36,826<\/td>\n36,682<\/td>\n32,690<\/td>\n<\/tr>\n
      Selling, general, and administrative expenses<\/td>\n<\/td>\n11,398<\/td>\n11,480<\/td>\n10,649<\/td>\n<\/tr>\n
      Depreciation and depletion<\/td>\n9<\/td>\n18,998<\/td>\n18,745<\/td>\n19,893<\/td>\n<\/tr>\n
      Exploration expenses, including dry holes<\/td>\n<\/td>\n1,269<\/td>\n1,466<\/td>\n1,790<\/td>\n<\/tr>\n
      Non-service pension ad postretirement benefit expense<\/td>\n17<\/td>\n1,235<\/td>\n1,285<\/td>\n1,745<\/td>\n<\/tr>\n
      Interest expense<\/td>\n<\/td>\n830<\/td>\n766<\/td>\n601<\/td>\n<\/tr>\n
      Other taxes and duties<\/td>\n19<\/td>\n30,525<\/td>\n32,663<\/td>\n30,104<\/td>\n<\/tr>\n
            Total 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
      Income 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
      Net 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 ExxonMobil 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
      Subcategory, <\/span>Current assets<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            Cash and cash equivalents<\/td>\n<\/td>\n3,089<\/td>\n3,042<\/td>\n<\/tr>\n
            Notes and accounts receivable, less estimated doubtful amounts<\/td>\n6<\/td>\n26,966<\/td>\n24,701<\/td>\n<\/tr>\n
            Subcategory, <\/span>Inventories<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
                  Crude oil, products and merchandise<\/td>\n3<\/td>\n14,010<\/td>\n14,803<\/td>\n<\/tr>\n
                  Materials and supplies<\/td>\n<\/td>\n4,518<\/td>\n4,155<\/td>\n<\/tr>\n
            Other current assets<\/td>\n<\/td>\n1,469<\/td>\n1,272<\/td>\n<\/tr>\n
                  Total current assets<\/td>\n<\/td>\nSingle Line<\/span>50,52<\/td>\nSingle Line<\/span>47,973<\/td>\n<\/tr>\n
      Investments, advances, and long-term receivables<\/td>\n8<\/td>\n43,164<\/td>\n40,790<\/td>\n<\/tr>\n
      Property, plant and equipment, at cost, less accumulated depreciation and depletion<\/td>\n9<\/td>\n253,018<\/td>\n247,101<\/td>\n<\/tr>\n
      Other assets, including intangibles, net<\/td>\n<\/td>\n16,363<\/td>\n10,332<\/td>\n<\/tr>\n
            Total 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

Long-term receivables and miscellaneous, net of reserves of $5,643 million and $5,471 million5,1415,590<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS<\/th>\n<\/tr>\n
8. Investments, Advances, and Long-Term Receivables<\/th>\n<\/tr>\n
Description <\/span><\/th>\nDec. 31, 2019<\/th>\nDec. 31, 2018<\/th>\n<\/tr>\n<\/thead>\n
<\/td>\n(millions of dollars)<\/em><\/td>\n<\/tr>\n
Subcategory, <\/span>Equity method company investments and advances<\/td>\n<\/tr>\n
     Investments<\/td>\n29,291<\/td>\n26,382<\/td>\n<\/tr>\n
     Advances<\/td>\n8,542<\/td>\n8,608<\/td>\n<\/tr>\n
            Total equity method company investments and advances<\/td>\nSingle line<\/span>
\n37,833<\/td>\n		Single line<\/span>
\n34,990<\/td>\n<\/tr>\n
Equity securities carried at fair value and other investments at adjusted cost basis<\/td>\n190<\/td>\n210<\/td>\n<\/tr>\n
            Total<\/td>\nSingle line<\/span>
\n43,164Double line<\/span><\/td>\n		Single line<\/span>
\n40,790Double line<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\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","protected":false},"author":6,"menu_order":20,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Module 10 Putting it Together: Other Assets\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":254,"module-header":"","content_attributions":[{"type":"original","description":"Module 10 Putting it Together: Other Assets","author":"Joseph Cooke","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/274"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/users\/6"}],"version-history":[{"count":0,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/274\/revisions"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/parts\/254"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/274\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/media?parent=274"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=274"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/contributor?post=274"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/license?post=274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}