In business and accounting an asset is anything owned, whether in possession or by 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. Asset is 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 asset s); liquid assets, which are a subdivision of current assets and also categories labelled trade investment s, quoted investment s, etc.
In the balance sheet of a company certain divisions are required by law, which varies from country to country.
1 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 liabilitiesIn the most general sense, a liability is anything that is a hinderance, or puts one at a disadvantage. In accounting In accounting, a financial liability is something that is owed to another party. This is typically contrasted with an asset which is some.
2 Fixed assets
Assets which are purchases for continued and long-term use in earning profitProfit is what is gained, after costs are accounted for. In accounting, this is usually measured in monetary terms. In economics, profit is most often measured differently, since costs are opportunity costs. Profit is income received by buying low and sel in a business. Examples: landLand is sometimes used synonymously with country. Land can also be for "a land of a people", particularly in the absence of a state or government, which is rather implicated by the near-synonym country. The land is the part of the Earth that is not covere, buildingBuilding is either the act of creating an object assembled from more than one element, or the object itself. A building is usually a human-created object composed of more than a single element, permanently fixed to the ground, that mediates one or more ass, machinery, etc. They are written off against profitProfit is what is gained, after costs are accounted for. In accounting, this is usually measured in monetary terms. In economics, profit is most often measured differently, since costs are opportunity costs. Profit is income received by buying low and sels over their anticipated life by charging an annual amount calculated so as to eliminate the original cost ( historical costThe term historical cost describes the original cost of an asset at the time of purchase or payment as opposed to its saleable value, replacement value or value in present or alternative use.), less scrap value, over that period. (see depreciationDepreciation is an estimate of the decrease in the value of an asset, caused by wear and tear or by obsolescence. The use of depreciation affects a company's (or an individual's) financial statements, and, in some countries, their taxes. Accounting A comp).
1 See also
Accounting
