Final answer:
Non-current assets are listed under long-term assets on a SOFP and represent the long-term value to the company. The money on a bank balance sheet represents various financial commitments rather than actual cash on hand.
Step-by-step explanation:
Non-current assets are shown on a Statement of Financial Position (SOFP) under the long-term assets section. These assets are not expected to be converted into cash within one year and include items such as property, plant, and equipment (PP&E), intangible assets, and long-term investments. They are shown on the SOFP because they are critical for the long-term operation of a company, and provide value over an extended period. Accurate representation of non-current assets is important for stakeholders to assess the company's health and investment potential.
The money listed under assets on a bank balance sheet may not actually be in the bank because these figures represent various financial transactions and commitments, like outstanding loans that the bank expects to be repaid, rather than physical cash on hand. Considering the acquisition of loans in the secondary market, buyer willingness to pay more or less for a loan can vary. If a borrower has been late on loan payments, the loan is riskier and the buyer may pay less. Conversely, if interest rates have risen since the loan was made, the loan's fixed rate may now be below market and less attractive, leading a buyer to pay less. However, if the borrower is a firm with newly declared high profits, the loan may be seen as more secure, and a buyer may be willing to pay more. Similarly, if interest rates have fallen, a fixed-rate loan originated at higher rates becomes more valuable, increasing the buyer's willingness to pay a premium.