What Is An Asset?

An asset is any resource with value that is held by a company, individual or country. Assets add to value and are bought either to increase value or to benefit the firm.

There are two main ways in which the term asset is used:

  • To refer to items on the balance sheet of a company which add value
  • Items traded in financial markets

All assets are listed on a company's balance sheet and are defined as either current (held for less than one year) or long term (held for more than one year). The most common kinds of assets found on a balance sheet are listed below:

Current Assets

  • Cash & Cash Equivalents
  • Short-Term Investments
  • Accounts Receivable
  • Inventory
  • Deferred Tax Assets
  • Prepaid Expenses

Long Term Assets

  • Long-Term Investments
  • Plants, Property & Equipment (PP&E)

Intangible Assets

  • Goodwill
  • Patents
  • Trademarks

Assets traded in the financial markets are also known to as securities and include instruments such as shares, bonds, derivatives, ETFs etc.

Related Terms

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