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 anything that can be used to produce positive economic value and represents value of ownership that can be converted into cash. Assets can be tangible or intangible and can include things like cash, savings accounts, bonds, life insurance policies, jewelry, collectibles, work experience, machinery, inventory, and patents.
Assets are reported on a companys balance sheet and are bought or created to increase a firms value or benefit the firms operations. An asset is something that may generate cash flow, reduce expenses, or improve sales, regardless of whether its manufacturing equipment or a patent. The International Financial Reporting Standards (IFRS) defines an asset as "a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise".
There are six types of assets: financial, physical, intangible, current, non-current, and operating. Financial assets include cash, stocks, and bonds. Physical assets include real estate, machinery, and inventory. Intangible assets include patents, trademarks, and copyrights. Current assets are those that can be converted to cash within one year, while non-current assets are those that cannot. Operating assets are those that are used to generate revenue.
