Asset – What is Asset ?

What is Asset ?

In essence, assets can be defined as the resources with an economic value that an organization, individual or country controls/owns with the vision of reaping benefits in the future.

Typically, assets are purchased by company to boost its own value, or to earn profits through improved operation and distribution. Therefore it won’t be an exaggeration if went on calling assets something that can generate cash flow. This is true for companies from virtually every single sector.Ads by Google

Based on the context of accounting, assets can be further divided into two distinct divisions: one, current while the other is fixed or non- current.

Current assets refer to those that will be consumed within one year, for example – account receivable, cash, as well as inventory. Fixed assets, on the other hand, are those that can be expected to continue providing benefits for more than a year, such as buildings, real estates and equipments.

There is another type of asset that a company can win – Intangible assets, e.g. goodwill, trademark, patents, copyright, leases, import/export permits, distribution rights, and so on.

 

Edited and Updated 08th January 2014

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