Definition:
An asset is a resource that is owned or controlled by a company and is expected to provide future economic benefits. Assets can be tangible or intangible.
Types of assets:
- Current assets: Assets that are expected to be converted into cash or used up within one year. Examples include cash, accounts receivable, inventory, and prepaid expenses. 1. charkhari.info charkhari.info
- Non-current assets: Assets that are not expected to be converted into cash or used up within one year. Examples include property, plant, and equipment, intangible assets, and investments. 1. www.numerade.com www.numerade.com
Key points about assets:
- Ownership: Assets are owned or controlled by the company.
- Future benefits: Assets are expected to provide future economic benefits.
- Balance sheet: Assets are listed on the balance sheet of a company.
- Valuation: Assets are valued at their fair market value or historical cost.
Why are assets important?
- Financial health: A company’s assets are a key indicator of its financial health.
- Decision-making: Assets are used to make decisions about investments, financing, and operations.
- Profitability: Assets are used to generate revenue and profits.
In essence, assets are the resources that a company owns or controls, and they are essential for the company’s financial success.
