Asset

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DEFINITION of 'Asset'

1. A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.

2. A balance sheet item representing what a firm owns.

INVESTOPEDIA EXPLAINS 'Asset'

1. Assets are bought to increase the value of a firm or benefit the firm's operations. You can think of an asset as something that can generate cash flow, regardless of whether it's a company's manufacturing equipment or an individual's rental apartment.

2. In the context of accounting, assets are either current or fixed (non-current). Current means that the asset will be consumed within one year. Generally, this includes things like cash, accounts receivable and inventory. Fixed assets are those that are expected to keep providing benefit for more than one year, such as equipment, buildings and real estate.

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RELATED FAQS
  1. How is asset turnover calculated?

    The asset turnover ratio measures the efficiency of a company's assets to generate revenue or sales. It compares the dollar ... Read Full Answer >>
  2. What is the formula for calculating return on assets (ROA)?

    The return on assets (ROA) calculation is used to analyze a company's ability to generate profits from its assets: ROA = ... Read Full Answer >>
  3. What is double entry bookkeeping and how does it work in the general ledger?

    Double entry bookkeeping is the concept that every accounting transaction has two affects on a company’s finances. The general ... Read Full Answer >>
  4. How should investors interpret accounts receivable information on a company's balance ...

    Investors should interpret accounts receivable information on a company's balance sheet as money that the company has a reasonable ... Read Full Answer >>
  5. What does your net-worth consist of?

    Your net worth consists of your assets less your liabilities. Assets include cash, investments, bank accounts, retirement ... Read Full Answer >>
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