An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit. In financial accounting, an asset is any resource owned or controlled by a business or an economic entity that can be used to produce positive economic value. Assets can be tangible or intangible and can include anything from machinery and buildings to patents and trademarks.
Some key characteristics of assets include:
- They are reported on a companys balance sheet.
- They are bought or created to increase a firms value or benefit the firms operations.
- They may generate cash flow, reduce expenses, or improve sales.
- They have current or future economic value to a business.
There are different types of assets, including tangible assets (such as machinery, buildings, and inventory) and intangible assets (such as patents, trademarks, and goodwill) . Personal assets may include a house, car, investments, artwork, or home goods.
Its important to note that an asset is not the same as a liability. While an asset is something of value that an individual or company owns, a liability is something that an individual or company owes to others.
