In business and accounting an asset is anything owned, whether in possession or by right to take possession, by a person or a group actiong together, e.g. a company, the value of which can be expressed in monetary terms.
Assets may be classified in many ways. The principal distinction normally made for business purposes is between:
- fixed assets and
- current assets.
Those are assets continually turned over in the course of a business during normal business activity. Examples: debtors, stock, cash and work in progress. The phrase net current assets (also callled working capital) is often used and refers to the total of current assets less the total of current liabilities.
Assets which are purchases for continued and long-term use in earning profit in a business. Examples: land, buildings, machinery, etc. They are written off against profits over their anticipated life by charging an annual amount calculated so as to eliminate the original cost (historical cost), less scrap value, over that period. (see depreciation).
In economics, an asset is defined as a resource used to create economic wealth.
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