The Finance Dictionary

This information provides users with thorough and reliable meanings to all the most common, and even uncommon, financial terms

Assets

In a broad sense an asset is simply another word for an item that is owned by somebody. Anything that is owned by a business, company, individual or government that can be sold to make cash is considered an asset. Your house is a valuable asset; your car is an asset although it loses its value. In a strict sense even your jogging shorts are an asset, in that you could probably sell them or use the material in some profitable manner. Generally though, assets refer to things that are actually worth selling as part of a business. For example a business in liquidation may “sell its assets” which may be its stock, machinery, buildings etc.

It’s not just tangible items that are considered assets, but intangible assets as well. These may include stocks and shares, contracts, agreements, futures, accounts and so on. In today’s age knowledge is a huge asset and can be sold, in information products or on your job CV.

In business and accounting there are several types of assets. Current Assets are a business’ cash, stock or other items that are expected to convert in to cash within a year. For example a shopkeeper’s till money and the products on the shelves are current assets.

Fixed Assets are assets that tend to be fixed in position and are needed for long term profit making, such as buildings, warehouses and machinery.
Other things that are considered assets are long term investments and things like copyrights and patents because they can be sold if a business venture goes bust.

For individuals assets that are really considered to be worth money are houses, vehicles, expensive jewelry and electronics. If bailiffs are sent to take items to cover somebody’s debts they will go straight to TV’s and other electronics.