What is an Asset?

An Asset is any resource owned or controlled by a business or individual that holds current or future economic value. Assets can be tangible or intangible and are fundamental to balance sheets and financial reporting.

Types of Assets

• Current Assets: Cash, inventory, accounts receivable — expected to convert to cash within a year.

• Fixed Assets: Property, plant, equipment — long-term use in business operations.

• Intangible Assets: Patents, trademarks, goodwill — non-physical but valuable.

Example

A retail store’s assets may include inventory, cash, computers, and its brand value.

Importance

• Key to evaluating a company’s financial health.

• Supports borrowing capacity and investment decisions.

• Forms the basis for financial ratios like return on assets (ROA).