Define: Assets

Business, Legal & Accounting Glossary

Definition: Assets


Quick Summary of Assets


Rights or other access to future economic benefits controlled by an entity as a result of past transactions or events.



What is the dictionary definition of Assets?

Dictionary Definition


  1. Something or someone of any value; any portion of one’s property or effects so considered.
  2. software Any component, model, process or framework of value that can be leveraged or reused.
  3. espionage intelligence asset

In common terms, an asset is an object, tangible or intangible, that is of value to its possessor. In most cases, an asset is cash or can be turned into cash; however, exceptions occur; for example prepayments.

An asset can include anything that provides economic value to a company. An asset might be obvious – such as cash, stocks and bonds (securities), accounts receivable or real estate. An asset could be something harder to measure – such as inventory, pre-paid expenses or office equipment. An asset might also be the good name and reputation of a company. Patents and copyrights could also be considered an asset due to their potential earning power. An asset such as the daily business activities of a company and work in progress might contribute to positive monetary value as well. The term asset covers a broad range of both tangible and intangible items. In short, anything that is owned by a company, whether visible or not, which has the possibility to provide financial gain is called an asset.


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Full Definition of Assets


In business and accounting, an asset is anything owned, whether in possession or by a right to take possession, by a person or a group acting together, e.g. a company, the value of which can be expressed in monetary terms. Assets are listed on the balance sheet. It has a normal balance of debit. Assets may be classified in many ways. The principal distinction normally made for business purposes is between fixed assets and current assets.

Other business subdivisions include intangible assets, that is, those assets which, though not visible, add to the earning power of the business, e.g. goodwill, patents, copyrights, etc. (also called invisible assets); liquid assets, which are a subdivision of current assets and also categories labelled trade investments, quoted investments, etc.

Assets may be classified in many ways.

Generally, an asset is something that is of value to a company. An asset can then be broken down further into Tangible and Intangible assets.

Examples of tangible assets include property, vehicles, stock, cash, money held in the bank and Debtors (as they owe money from sales made by the company).

However, these can be broken down still further into Fixed Assets and Current Assets Examples of intangible assets include patents, copyrights, trademarks and goodwill. While these may not have value to the man on the street, these generate income for the company.

The principal distinction normally made for business purposes is between:

fixed assets and
current assets.

Other business subdivisions include intangible assets, that is, those assets which, though not visible, add to the earning power of the business, e.g. goodwill, patents, copyrights, etc. (also called invisible assets); liquid assets, which are a subdivision of current assets and also categories labelled trade investments, quoted investments, etc.

In the balance sheet of a company, certain divisions are required by law, which varies from country to country.

Current assets

Those are assets continually turned over in the course of a business during normal business activity. Examples: debtors, stock, cash and work in progress. The phrase net current assets (also called working capital) is often used and refers to the total of current assets less the total of current liabilities.

Fixed assets

Assets which are purchases for continued and long-term use in earning profit in a business. Examples: land, buildings, machinery, etc. They are written off against profits over their anticipated life by charging an annual amount calculated so as to eliminate the original cost (historical cost), less scrap value, over that period. (see depreciation).
These are also called capital assets in management accounting, especially when intangibles are considered.

Intangible Assets are items such as patents, copyrights, trademarks, licenses, franchises, and other kinds of rights or things of value to a company, which are not physical objects. These assets may be the most important ones a company owns. Often they do not appear on financial reports.


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Examples of Assets in a sentence


Even though half of the company’s assets are outstanding loans, they’re still counted as income on the budget.
The company insures about $1.8 billion in assets.


Synonyms For Assets


property, capital, resources, wealth, money


Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/assets/
Modern Language Association (MLA):
Assets. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 07, 2020 https://payrollheaven.com/define/assets/.
Chicago Manual of Style (CMS):
Assets. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/assets/ (accessed: April 07, 2020).
American Psychological Association (APA):
Assets. PayrollHeaven.com. Retrieved April 07, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/assets/

Definition Sources


Definitions for Assets are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 25th March, 2020