A thing, person, or quality which is useful or beneficial is termed an asset. In the financial world, assets are things tangible or intangible that hold an economic value and are held by businesses to extract future benefits. Their value is adjudged by the amount they can fetch in monetary terms & that number is further used in the appropriate column of a company’s balance sheet.
Examples of assets – Cash, machinery, stock, building, vehicles, receivables, copyrights, patents, logos, etc. They can be classified as Current, Fixed, Tangible, Intangible etc.
In Simple Terms – An asset is a piece of property that is valuable and useful. It is a thing that has economic value and can be utilized by businesses to generate income in the future. Its value is judged by how much money it can be sold for. A company’s balance sheet shows the value of an asset.
A firm bought a new printer for official purposes priced at 1,00,000. The printer, in this case, is an asset to the business and the amount to be booked in the balance sheet will be 1,00,000. This is a tangible asset which is subject to depreciation, unlike an intangible asset which is amortized.
Short Quiz for Self Evaluation
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