What is a fictitious asset?

Fictitious asset is an accounting record that does not match the tangible asset and is not an intangible asset. These assets are not assets at all. The accounting record places deferred revenue expenses on the account of assets as a mechanism of possession until these expenses can be reported against the profit or loss account. This type of accounting fiction can be legal or illegal, depending on the record of the record. Accounting systems

are designed to monitor the company's income and expenses and classify and evaluate assets and obligations for tax and report purposes. Financial accounting for businesses corresponds to accounting standards established to normalize business reporting, so investors can compare financial records across companies. Business accounting requires accounting and accountants to use a double entry system that debitus and attribute books, to withdraw money from the company on the one hand to pay the costs and return the asset for the company purchased with money on the otherm.

One of the primary categories with which the accountant and accountants are assets. Assets are things that own business, such as equipment, equipment, supplies and cash. These items can be classified on books in different ways. Some assets are considered solid assets and some are classified as tangible or intangible assets. All these classifications relate to something that really exists, whether you can touch it or is simply an existing intangible right. The enterprise was able to obtain these assets by making a purchase or receiving a transfer that results in a corresponding item to the cost account.

Under certain circumstances, the company generates expenditure that it cannot immediately place on the correct account in the books. For example, the company may have a start-up COSTS that have not led to an asset that is now sitting in the company's inventory. Business can create a fictitious account of assetsthat will have expenditures until the amounts are written against the profit or loss account over time. The fictitious asset appears in the balance sheet of society as an existing value, but in fact it does not exist. It has no actual value as an asset and cannot be sold.

Using a fictitious asset account is a legitimate way to maintain these types of unconnected expenditure as long as they can be properly processed. The situation is captured in an illegal territory when businesses create a fictitious account of assets to cheat investors or otherwise falsify the balance sheet. In this case, the enterprise may be responsible for anyone who relied on misinformation and may be fined or prosecuted by government tax agencies or regulatory securities.