asset
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(ăs'ĕt') 
n.
n.
- A useful or valuable quality, person, or thing; an advantage or resource: proved herself an asset to the company.
- A valuable item that is owned.
- A spy working in his or her own country and controlled by the enemy.
- assets
- Accounting. The entries on a balance sheet showing all properties, both tangible and intangible, and claims against others that may be applied to cover the liabilities of a person or business. Assets can include cash, stock, inventories, property rights, and goodwill.
- The entire property owned by a person, especially a bankrupt, that can be used to settle debts.
[Back-formation from English assets, sufficient goods to settle a testator's debts and legacies, from Anglo-Norman asetz, from asez, enough, from Vulgar Latin *ad satis, to sufficiency : Latin ad, to; see ad- + Latin satis, enough.]
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asset
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Fowler (1926) called this a 'false form', meaning that the true form was assets, derived from a late Anglo-French word which came in turn from Latin ad satis meaning 'to sufficiency', while asset was the lazy writer's alternative when unwilling to choose between words such as possession, gain, advantage, resource, and other synonyms. Assets was originally construed as singular but after about 1800 was construed as plural, giving rise to the singular form asset, which is now standard in a range of physical and non-physical meanings:
Mays Cottage was a period piece, completely unrestored, which in these days seemed to be an asset—Margaret Drabble, 1975
I still am prone to theorising about anything I have grown fond of or am familiar with (I wonder if it is an asset at all?)—weblog, Indian English 2004 [Old English (up to 1150)C].
| assassinate, assassination, aside, a side, ascendancy, ascendant | |
| assignment, assignation, assimilation, assist |
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Anything owned by a person or organization having monetary value, usually its cost or fair market value. An asset may be a specific property, such as title to real estate or other tangible property, or enforceable claims against others.
1. Banking. Loans, discounts, investment securities (government bonds, municipal bonds), and claims against other banks. Loans account for the largest portion of interest earning assets held by banks and thrift institutions. Also included in this category are Federal Funds sold to other banks; checks in the process of collection. See also Real Estate Owned; Trading Account Assets.
2. Finance. There are several major asset categories: (1) current assets-cash and short-term items convertible into cash within one year; (2) Fixed Assets-furniture, plant, and equipment owned by a firm, which are depreciated over their useful life; (3) Intangible Assets-patents, trademarks, or goodwill, which have a value and carry a cost; and (4) pledged assets-collateral for a bank loan or purchase of securities on margin.
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Something of value.
Example: Land, houses, cars, furniture, cash, bank deposits, and securities owned are assets.
Example: Land, houses, cars, furniture, cash, bank deposits, and securities owned are assets.
| Assessor Parcel Number (APN), Assessor | |
| Assign, Assignee |
Roget's Thesaurus:
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asset
noun
- All things, such as money, property, or goods, having economic value. capital, fortune, mean, resource (used in plural), wealth, wherewithal. See owned/unowned.
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n.any piece of materiel that can be deployed advantageously against an enemy, or if belonging to an enemy, whose destruction will result in an advantage.
See the Introduction, Abbreviations and Pronunciation for further details.
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This entry contains information applicable to United States law only.
Real or personal property, whether tangible or intangible, that has financial value and can be used for the payment of its owner's debts.
An accrued asset is one that arises from revenue earned but not yet due. For example, an accrued dividend is a share of the net earnings of a corporation that has been declared but has not yet been paid out to its shareholder(s).
In bankruptcy, an asset is any form of property owned by a debtor who is insolvent that is not exempt from being used to repay debts.
For income tax purposes, a capital asset is property held by a taxpayer for personal enjoyment or investment, such as a home, furniture, stocks and bonds, or an automobile, but does not include inventory, commercial accounts, and notes receivable, depreciable property, commercial property, copyrights, and short-term government obligations. When a capital asset is sold, any gain received is given preferential tax treatment.
A current, liquid, or quick asset is an item that can be readily converted to cash, such as stocks and bonds.
A fixed asset is one of a permanent or long-term nature used in the operation of a business and not intended for sale.
A frozen asset is one that cannot be easily converted into cash, such as real estate when there is no market, or that cannot be used because of a legal restriction, such as a spendthrift trust.
An intangible asset is one to which an arbitrary dollar value is attached because it has no intrinsic market value but represents financial value, such as the good will of a business, trademarks, or patents.
; fixed asset; liquid asset.
See: capital asset.
A possession that can be turned into cash to cover liabilities.
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1. A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
2. A balance sheet item representing what a firm owns.
Investopedia Says:
1. Assets are bought to increase the value of a firm or benefit the firm's operations. You can think of an asset as something that can generate cash flow, regardless of whether it's a company's manufacturing equipment or an individual's rental apartment.
2. In the context of accounting, assets are either current or fixed (non-current). Current means that the asset will be consumed within one year. Generally, this includes things like cash, accounts receivable and inventory. Fixed assets are those that are expected to keep providing benefit for more than one year, such as equipment, buildings and real estate.
Related Links:
Learn this easy-to-understand technique of analyzing a company's financial statements and reports. Introduction To Fundamental Analysis
Do you rely too heavily on ROE? Consider using return on assets for a more complete picture. Use ROA To Gauge A Company's Profits
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Learn about the components of the statement of financial position and how they relate to each other. Reading The Balance Sheet
Knowing what the company's financial statements mean will help you to anaylze your investments. Breaking Down The Balance Sheet
Drafting a will and locking it away for good could negatively affect your beneficiaries. Reasons To Review Or Revise Your Will
Deciding what will happen to your assets when you pass away is a must - no matter how wealthy you are. Estate Planning Basics
Word Tutor:
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asset
IN BRIEF: An item that is owned that has some value.
The house on Elm Street was Virginia's greatest asset.
LearnThatWord.com is a free vocabulary and spelling program where you only pay for results!
Quotes About:
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Assets
Quotes:
"Because bankers measure their self-worth in money, and pay themselves a lot of it, they think they're fine fellows and don't need to explain themselves."
- James Buchan
"Most people...find a disorientating mismatch between the long-term nature of their liabilities and the increasingly short-term nature of their assets."
- Howard Davies
"No one has a greater asset for his business than a man's pride in his work."
- Mary Parker Follet
"Central banks don't have divine wisdom. They try to do the best analysis they can and must be prepared to stand or fall by the quality of that analysis."
- Eddie George
"I hate banks. They do nothing positive for anybody except take care of themselves. They're first in with their fees and first out when there's trouble."
- Harvey Goldsmith
Random House Word Menu:
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categories related to 'assets'
- Accounting - assets: articles or property of value; property, materials, and economic resources owned by business or individual
- Spending, Receiving, and Possessing Wealth - assets: all that one owns, all wealth possessed
See crossword solutions for the clue
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This article is about the business definition. For other uses, see Asset (disambiguation).
| Accountancy |
|---|
| Key concepts |
| Accountant · Accounting period · Accrual · Bookkeeping · Cash and accrual basis · Cash flow forecasting · Chart of accounts · Convergence · Journal · Special journals · Constant item purchasing power accounting · Cost of goods sold · Credit terms · Debits and credits · Double-entry system · Mark-to-market accounting · FIFO and LIFO · GAAP / IFRS · General ledger · Goodwill · Historical cost · Matching principle · Revenue recognition · Trial balance |
| Fields of accounting |
| Cost · Financial · Forensic · Fund · Management · Tax (U.S.) |
| Financial statements |
| Balance Sheet · Cash flow statement · Income statement · Statement of retained earnings · Notes · Management discussion and analysis · XBRL |
| Auditing |
| Auditor's report · Control self-assessment · Financial audit · GAAS / ISA · Internal audit · Sarbanes–Oxley Act |
| Accounting qualifications |
| CA · CPA · CCA · CGA · CMA · CAT · CIIA · IIA · CTP |
In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent ownership of value that can be converted into cash (although cash itself is also considered an asset).[1]
The balance sheet of a firm records the monetary[2] value of the assets owned by the firm. It is money and other valuables belonging to an individual or business.[1] Two major asset classes are tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets.[3] Current assets include inventory, while fixed assets include such items as buildings and equipment.[4]
Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place. Examples of intangible assets are goodwill, copyrights, trademarks, patents and computer programs,[4] and financial assets, including such items as accounts receivable, bonds and stocks.
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Contents
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Formal definition
- An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity[5] (Framework Par 49).
Asset characteristics
Other than software companies[citation needed] and the like - employees are not considered as assets, like machinery is, even though they are capable of producing value.
- The probable present benefit involves a capacity, singly or in combination with other assets, in the case of profit oriented enterprises, to contribute directly or indirectly to future net cash flows, and, in the case of not-for-profit organizations, to provide services;
- The entity can control access to the benefit;
- The transaction or event giving rise to the entity's right to, or control of, the benefit has already occurred.
In the financial accounting sense of the term, it is not necessary to be able to legally enforce the asset's benefit for qualifying a resource as being an asset, provided the entity can control its use by other means.
The accounting equation relates assets, liabilities, and owner's equity:
- Assets = Liabilities + Stockholder's Equity (Owner's Equity)
That is, the total value of a firms Assets are always equal to the combined value of its "equity" and "liabilities."
The accounting equation is the mathematical structure of the balance sheet.
Assets are listed on the balance sheet. Similarly, in economics an asset is any form in which wealth can be held.
Probably the most accepted accounting definition of asset is the one used by the International Accounting Standards Board.[6] The following is a quotation from the IFRS Framework: "An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise."[7]
Assets are formally controlled and managed within larger organizations via the use of asset tracking tools. These monitor the purchasing, upgrading, servicing, licensing, disposal etc., of both physical and non-physical assets.[clarification needed] In a company's balance sheet certain divisions are required by generally accepted accounting principles (GAAP), which vary from country to country.[8]
Current assets
Main article: Current asset
Current assets are cash and other assets expected to be converted to cash, gold, or consumed either in a year or in the operating cycle (whichever is longer), without disturbing the normal operations of a business. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets:
- Cash and cash equivalents — it is the most liquid asset, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, cheque, bank drafts).
- Short-term investments — include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities).
- Receivables — usually reported as net of allowance for noncollectable accounts.
- Inventory — trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the "lower of cost or market" rule.
- Prepaid expenses — these are expenses paid in cash and recorded as assets before they are used or consumed (a common example is insurance). See also adjusting entries.
Marketable securities Securities that can be converted into cash quickly at a reasonable price
The phrase net current assets (also called working capital) is often used and refers to the total of current assets less the total of current liabilities.
Long-term investments
Often referred to simply as "investments". Long-term investments are to be held for many years and are not intended to be disposed of in the near future. This group usually consists of three types of investments:
- Investments in securities such as bonds, common stock, or long-term notes.
- Investments in fixed assets not used in operations (e.g., land held for sale).
- Investments in special funds (e.g. sinking funds or pension funds).
Different forms of insurance may also be treated as long term investments.
Fixed assets
Main article: Fixed asset
Also referred to as PPE (property, plant, and equipment), these are purchased for continued and long-term use in earning profit in a business. This group includes as an asset land, buildings, machinery, furniture, tools,IT equipments like Laptop etc. and certain wasting resources e.g., timberland and minerals. They are written off against profits over their anticipated life by charging depreciation expenses (with exception of land assets). Accumulated depreciation is shown in the face of the balance sheet or in the notes.
These are also called capital assets in management accounting.
Intangible assets
Main article: Intangible asset
Intangible assets lack of physical substance and usually are very hard to evaluate. They include patents, copyrights, franchises, goodwill, trademarks, trade names, etc. These assets are (according to US GAAP) amortized to expense over 5 to 40 years with the exception of goodwill.
Websites are treated differently in different countries and may fall under either tangible or intangible assets.
Tangible assets
Tangible assets are those that have a physical substance, such as currencies, buildings, real estate, vehicles, inventories, equipment, and precious metals (f.i. gold)
Comparison : current assets , liquid assets and absolute liquid assets
| Current assets | Liquid assets | Absolute liquid assets |
|---|---|---|
| Stocks | ||
| Prepaid expenses | ||
| Debtors | Debtors | |
| Bills receivable | Bills receivable | |
| Cash in hand | Cash in hand | Cash in hand |
| Cash at bank | Cash at bank | Cash at bank |
| Accrued incomes | Accrued incomes | Accrued incomes |
| Loans and advances (short term) | Loans and advances (short term) | Loans and advances (short term) |
| Trade investments (short term) | Trade investments (short term) | Trade investments (short term ) |
See also
References
- ^ a b Sullivan, Arthur; Steven M. Sheffrin (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. pp. 272. ISBN 0-13-063085-3.
- ^ J. G. Siegel, N. Dauber & J. K. Shim, "The Vest Pocket CPA", Wiley, 2005.
There are different methods of assessing the monetary value of the assets recorded on the Balance Sheet. In some cases, the Historical Cost is used; such that the value of the asset when it was bought in the past is used as the monetary value. In other instances, the present fair market value of the asset is used to determine the value shown on the balance sheet.
- ^ J. Downes, J.E. Goodman, "Dictionary of Finance & Investment Terms", Baron's Financial Guides, 2003
- ^ a b J. Downes, J.E. Goodman, "Dictionary of Finance & Investment Terms", Baron's Financial Guides, 2003; and J. G. Siegel, N. Dauber & J. K. Shim, "The Vest Pocket CPA", Wiley, 2005.
- ^ IFRS for SMEs. 1st Floor, 30 Cannon Street, London EC4M 6XH, United Kingdom: IASB (International Accounting Standards Board). 2009. pp. 14. ISBN 978-0-409-04813-1.
- ^ The International Accounting Standards Board, IASB
- ^ IASB.org, IFRS
- ^ Intermediate Accounting--Kieso, et. al
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)
Translations:
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Asset
Dansk (Danish)
n. - aktiv, fordel
idioms:
- assets and liabilities aktiver og passiver
Nederlands (Dutch)
aanwinst, waardevolle eigenschap, bezit, goed, activa
Français (French)
n. - avoir, biens, capital, (Comm, Fin, Jur) actif, avantage, atout
idioms:
- assets and liabilities actif et passif
Deutsch (German)
n. - Vorzug, Gut
idioms:
- assets and liabilities Soll und Haben, Vermögen und Schulden
Ελληνική (Greek)
n. - περιουσιακό στοιχείο, προσόν, αξία, πλεονέκτημα, ατού, (οικον.) στοιχείο ενεργητικού, (πληθ.) ενεργητικό
idioms:
- assets and liabilities (οικον.) ενεργητικό και παθητικό
Italiano (Italian)
vantaggio, risorsa
idioms:
- assets and liabilities attivo e passivo, rosso e nero
- capital assets beni immobili
- fixed assets beni fissi
Português (Portuguese)
n. - bens (m pl) (Jur.), ativo (m) (Jur.)
idioms:
- assets and liabilities ativo (m) e passivo (m)
- capital assets bens (m pl) de capital
- fixed assets ativo (m) fixo
Русский (Russian)
имущество, ценное качество
idioms:
- assets and liabilities актив и пассив (фин.)
- capital assets основные средства
- fixed assets имущество, основные средства
Español (Spanish)
n. - posesión, propiedad, ventaja, bienes, activo
idioms:
- assets and liabilities activos y pasivos
Svenska (Swedish)
n. - ägodel, tillgång
中文（简体）(Chinese (Simplified))
资产, 有用的东西
idioms:
- assets and liabilities 资产和负债
中文（繁體）(Chinese (Traditional))
n. - 資產, 有用的東西
idioms:
- assets and liabilities 資產和負債
日本語 (Japanese)
n. - 遺産, 全資産, 資産, 役に立つもの, 長所, 宝
idioms:
- assets and liabilities 資産と負債
- fixed assets 固定資産
العربيه (Arabic)
(الاسم) ممتلكات, أصول, موجودات, شي ثمين, مصدر قوه
עברית (Hebrew)
n. - נכס, רכוש, אדם או דבר בעלי ערך
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