Final answer:
Land improvements on a balance sheet refer to enhancements to land that increase its value, such as landscaping or paving, and are depreciable assets. A balance sheet shows a company's financial position, listing assets, liabilities, and equity. Banks also use balance sheets, reflecting similar categories of financial items.
Step-by-step explanation:
Land improvements reported on a company's balance sheet might include enhancements to a company's property that increase the value or utility of the land, such as landscaping, paving, fencing, outdoor lighting, and irrigation systems. These improvements have a limited, although often long-term, useful life and are categorized as fixed assets under property, plant, and equipment (PPE). Unlike the land itself, which is not subject to depreciation, land improvements are typically depreciable over their useful life.
A balance sheet, part of a company's financial statements, illustrates a firm's financial position at a specific point in time. It lists the company's assets, liabilities, and the net worth (also referred to as equity or shareholder's equity). A comprehensive understanding of a balance sheet helps in assessing a company's net worth, financial health, and capital structure.
For banks, a balance sheet operates similarly, showing assets such as cash, reserves held at the Federal Reserve, loans made to customers, and bonds, alongside liabilities like deposits and net worth, which equals assets minus liabilities.