Asset

In accounting, an asset is any resource owned by a business, having economic value or the expectation of future benefit.

An asset can have tangible value (such as cash, notes receivable, accounts receivable, property, stock, inventory, fixtures, and business machinery), or intangible value (such as property rights, patents, and goodwill).

Financial Statements[edit]

On a company's financial statement, assets are classified as "current" and "non-current".

Current assets are defined as those which can or will be converted to cash within one year. In addition to cash, current assets will generally include accounts receivable, short-term assets such as certificates of deposit, the unused portion of prepaid expenses, inventory, and if a company has a long-term receivable (such as selling an old facility to a new owner), the portion of the receivable which it expects to collect during the year.

Non-current assets are all others which are not current. Common examples are land and facilities, manufacturing equipment, and intangible assets. Also, the portion of a long-term receivable owed after one year is classified as non-current.

When assets become impaired, their value must be adjusted. The most common adjustments shown on financial statements are "contra-asset" accounts for uncollectible accounts receivable, and for depreciation and amortization.

A business's net assets (or net worth) is the excess of assets over liabilities.

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