Updated on March 18, 2023
Assets are any resources that have been acquired by the business for any consideration. These assets are put to use in the day to day operations of the business to meet the objectives of the organisation. Assets represent ownership of these resources and the same can be converted to cash whenever required.
Assets come in different types and forms based on their nature, utility, etc
Classification of assets
From a business perspective assets can be classified under many types like tangible and intangible assets, fixed assets, current assets or liquid assets, etc. While tangible assets are assets that exist in the physical form and can be movable or immovable, intangible assets on the other hand are non-physical assets like patents, copyrights, trademarks, etc.
Similarly, fixed assets are long-term assets of the business that are crucial for its survival and growth (for example, plant and machinery) while current assets are short-term assets like receivables, inventories, advances, cash and bank balances, etc. Investments made by the entity on shares or other financial instruments whether belonging to other companies or not also amount to being company assets.
From the individual investor’s perspective, an asset is a broad term that includes personal assets like real estate, cash and bank balance, jewellery, investments made in stock markets, bonds, government securities, or other investment options like PPF, EPF, bank FDs, etc.