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economic resource, from which future economic benefits are expected

An assent is something valuable or useful. In business and accounting, the value of an asset is expressed as certain amount of money. The amount of money can be calculated as the amount of economic value that the asset can produced in future. The calculation is based past transactions or events. Correct evaluation can be useful in deciding what to do with an asset.

Examples of assets include money, property (land and buildings), and amounts to be received from someone.

There are two types of assets:

  • tangible assets
    • Fixed assets such as buildings, equipment etc.
    • Current assets like inventory
  • Intangible assets e.g. goodwill, patents, trademarks, copyright, computer programs

Asset characteristicsEdit

Assets have three important characteristics:

  • They can give a future benefit to contribute directly or indirectly to future net cash flows, and, in the case of not-for-profit organizations, to give services;
  • It can control access to the benefit; and,
  • The transaction or event which created the asset has already occurred.

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