Assets

An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit. Assets are reported on a company’s balance sheet, and they are bought or created to increase the value of a firm or benefit the firm’s operations. An asset can be thought of as something that in the future can generate cash flow, reduce expenses, improve sales, regardless of whether it’s a company’s manufacturing equipment or a patent on a particular technology.

Assets can be broadly categorized into:

• Current Assets
  Current assets are short-term economic resources that are expected to be converted into cash within one year. Current assets include cash and cash equivalents, accounts receivable, inventory, and various prepaid expenses.
• Fixed Assets
  Fixed assets are long-term resources, such as plants, equipment and buildings.
• Financial Assets
  Financial assets represent investments in the assets and securities of other institutions. Financial assets include stocks, sovereign and corporate bonds, preferred equity, and other hybrid securities.
• Intangible Assets
  Intangible assets are economic resources that have no physical presence. They include patents, trademarks, copyrights and goodwill.