I’ll admit, sometimes the asset listing on a balance sheet can look confusing. Over the next several weeks, I’ll explain the detail behind four typical asset categories shown on a shared airplane ownership balance sheet:
- Cash & Receivables
- Funded Reserves
- Prepaid Items
- Fixed Assets or The Airplane
A balance sheet shows assets at a specific date in time. It’s a standard practice to list assets in order of liquidity.
How do you calculate Cash & Receivables?
In this example, cash would represent the checking account balance as of March 31st. Receivables would represent money owed but not yet paid by members. Typically, an invoice would be prepared for the previous month member flight time and sent to members. The invoices to members become a receivable. I added cash and receivables together and listed them on the balance sheet.
Balance Sheet Assets (Liabilities and Owners Equity not shown)
| Assets | 3/31/16 | |
| Cash & Receivables | 8,517 | |
| Receivables: | ||
| Member – Jones | 275 | |
| Member – Smith | 420 | |
| Funded Reserves (Savings) | 19,000 | |
| Funded Reserve (Pre-TBO cylinder maintenance) | 2,000 | |
| Funded Reserve (Post TBO: engine, prop) | 17,000 | |
| Prepaid Items | ||
| Airport Hangar | 2,723 | |
| Insurance | 1,165 | |
| Subscriptions | 656 | |
| Net Aircraft Value | 230,600 | |
| Aircraft: Cirrus SR22 | 250,000 | |
| Depreciation (BRS Ballistic Recovery System) | (2,400) | |
| Depreciation (TBO: engine,prop overhaul) | (17,000) | |
| Total Assets | $262,660 |
Next week will review the presentation of funded reserves.
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