Can net assets be negative on the balance sheet?
Friday, July 30th, 2010 at
4:36 am
I’m working on a project and have to forecast a company’s balance sheet 6 years into the future. I used the percentage-of-sales method and wound up with negative net fied assets for the final two years. This was due to an accumulated depreciation higher than fixed assets for the year. When combining them with total current assets, both years come out positive in total assets.
Is this something that can stay as is, or do net fixed assets always have to be positive?
Tagged with: 6 years • balance sheet • current assets • depreciation • google • net fixed assets • script type • text javascript
Filed under: Bed In A Bag
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"accumulated depreciation higher than fixed assets"
I think some sort of error was made because depreciation can never exceed the fixed assets. At the worst, it will be the same as fixed assets but never higher.