The balance sheet for your company shows your assets, your liabilities and the owners' equity. Investments are listed as assets, but they're not all clumped together. Long-term investments on a balance sheet, for instance, are listed separately from short-term investments.
TL;DR (Too Long; Didn't Read)
You show investments you plan to sell within a year as current assets on the balance sheet. Long-term investments are a separate account.
The Balance Sheet Equation
The balance sheet is an equation. On one side of the equals sign is your company's total assets. Cash in the bank, inventory, accounts receivable and investments all go on the balance sheet as assets.
Company liabilities go on the other side of the equals sign. They include loans you have to pay back, wages you haven't paid out and taxes and interest you owe.
Stockholders' equity, the value of the company left if you paid off all your debts, goes on the same side as the liabilities. Equity plus liabilities always equal your assets.
Long-Term Investments: Balance Sheet
Short-term investments and long-term investments on the balance sheet are both assets, but they aren't recorded together on the balance sheet. Investments can include stocks, bonds, real estate held for sale and part ownership of other businesses.
Whether you report, say, your shares of Dow Chemical and Amalgamated Solar Power as long-term investments on the balance sheet depends on your intentions. If you intend to keep them for more than a year, they're long term. Otherwise, they're short-term or temporary assets
Suppose you have to report a quoted investment on the balance sheet. A quoted investment is, for example, shares whose values are quoted on a stock exchange. If you plan to sell them in two months, they're listed as current assets on the balance sheet. If it's two years, they'd go in a separate category: investments.
About Valuing Stocks
The more your assets outweigh your liabilities, the larger your investors' equity. It's easy to inflate the value of assets by overestimating the value of your investments, so financial rules are strict on how to set their worth. For example, you report stocks on the balance sheet at the current fair-market value rather than how much you paid for them.
To consider one balance sheet example, suppose your company's investments include $10,000 in stocks that you expect to sell within the year and $20,000 in stocks that you're holding for the long term. You report the quoted investments in the balance sheet at their current value, not the price you paid for them.
If the stocks have changed in value since you bought them, you report the change as unrealized gain or loss in the owner's equity section. Suppose they've gone up $3,000. You don't actually get that money until you sell, so you don't realize the profit until then. The same applies if the value drops.
The Cost Method
It's easy to set the value of quoted investments in the balance sheet because you have the current sale price on the exchange with which to work. The rules change if the value of the investment is harder to determine. For example, if your company owns a stake in a privately held company, there are no exchange sales to generate a price.
If you have a small ownership stake and can't exert any influence over the company, you report the value of your investment using the cost method — you report the value as the cost you paid for it. You don't have to adjust that price unless you have evidence that the investment is worth less than you paid for it.
The Equity Method
If you own at least 20% of another company, it's assumed that you have significant influence over it. In most cases, you'll have to use the equity method to calculate the value of your investment. This is considerably more complicated, as you have to consider factors such as any dividend income you earn.