Assets

An asset is a resource with economic value that an individual, company, or organization owns or controls as a result of past events and from which future economic benefits are expected to flow. Assets are typically used to produce goods or deliver services, generate cash, or support other operations. The concept emphasizes control: the entity has the rights to them and can derive benefits, often through sale, use, or transfer.

Assets are commonly categorized as tangible versus intangible, and as current (short-term) versus non-current (long-term). Tangible assets include cash, inventories, property, plant and equipment, and vehicles. Intangible assets include non-physical rights such as goodwill, patents, copyrights, software, and licenses. Financial assets comprise cash and contractual rights to receive cash or another financial asset, such as accounts receivable, investments in bonds, and equity securities.

Recognition and measurement follow established accounting concepts. An asset is recognized when it is probable that future benefits will flow to the entity and the asset’s cost or value can be measured reliably. Initial recognition typically records assets at cost. Subsequent measurement may use a cost model or, for some asset types, a revaluation model. Depreciation applies to tangible assets with finite useful lives; amortization applies to intangible assets with finite lives; depletion is used for natural resources. Impairment may be recognized if the asset’s carrying amount exceeds its recoverable amount.

On the balance sheet, assets are shown in order of liquidity and separated into current and non-current categories. Reporting frameworks such as IFRS and US GAAP provide guidance on recognition, measurement, and disclosure, shaping how assets are valued and presented in financial statements.