What is the 'Asset Ledger'

The asset ledger is the part of a company's accounting records that detail the journal entries relating only to the asset side of the balance sheet. Asset ledgers will have many sub-accounts, and the larger the company, the more numerous and complex the asset ledgers will be.

BREAKING DOWN 'Asset Ledger'

Simply, the asset ledger is a journal of a company's assets. Current assets are separated from long-term assets, then the components of current and long-term assets are broken down. The sub-accounts to the asset ledger can be extensive. Types of fixed assets, for example, would be categorized into property, plant and equipment and detailed individually. The asset ledger is one of many subsidiary accounts that feed into a company's general ledger. The general ledger is used to construct financial statements and is generally considered to be a company's "official accounting record."

Example of an Asset Ledger

Asset ledgers are internal records for a company; therefore, they are not disclosed publicly. For companies registered under the Securities and Exchange Act, financial statements are available to the public. The balance sheet of a company will itemize current and long-term assets. Honeywell International Inc. listed the following assets on its consolidated balance sheet as of December 31, 2017:

  • Cash and cash equivalents
  • Short-term investments
  • Accounts receivable
  • Inventories
  • Other current assets
  • Investments and long-term receivables
  • Property, plant and equipment
  • Goodwill
  • Other intangible assets
  • Insurance recoveries for asbestos-related liabilities
  • Deferred income taxes
  • Other long-term assets

In general, some additional details may be provided in a company's notes to financial statements, but the specifics of each asset type is kept in records by the company, which utilizes those records to "build up" the asset accounts that one sees on a balance sheet. Both internal auditors and independent auditors may review these and other ledgers to check for completeness and accuracy to make sure the process of financial statement compilation is sound.

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