economic resource that is expected to provide benefits to a business. An asset has three vital characteristics: (1) future probable economic benefit; (2) control by the entity; and (3) results from a prior event or transaction. Assets are expressed in money or are onvertible into money and include certain deferred charges that are not resources (e.g., deferred moving costs). They can berecognized and measured in conformity with Generally Accepted Accounting Principles (GAAP). Examples of ownership rights or service potentials are cash, automobiles, and land. An asset may be tangible or intangible. The former has physical substance such as a building. The latter lacks physical substance or results from a right granted by the government or another company such as goodwill and a patent. An asset may be current or noncurrent. A current asset has a life of one year or less (e.g., inventory) while a noncurrent asset has a life in excess of one year (e.g., machinery).
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.
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- 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.
- 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.
anything owned that has value; any interest in real property or personal property that can be used for payment of debts.
anything having commercial or exchange value that is owned by a business, institution, or individual.
entity with exchange or commercial value, such as the book value of property owned by an insurance company as listed on its balance sheet.
something of value.
Example: Land, houses, cars, furniture, cash, bank deposits, and securities owned are assets.
