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Assets (Accounting) - Explained

What are Assets?

Written by Jason Gordon

Updated at April 7th, 2022

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Table of Contents

What are Assets?What are Long-term and Short-Term Assets?What are Tangible and Intangible Asset?Examples of Assets

What is an Asset?

Assets are everything that we own. By definition, these are the resources that a company owns or controls. So, if we own it or control it, it's an asset. According to GAAP, an asset must be:

  • Controlled by the company,
  • The result of a past transaction, and
  • Result in a future benefit to the corporation. 


Back to: Accounting & Taxation

What are Long-term and Short-Term Assets?

Long-term assets will generally remain on-hand for more than one operating cycle or more than 12 months. 

Current Assets (Short-term assets) will generally be used, liquidated (converted into cash), or other disposed of within one operating cycle or within 12 month period. 

What are Tangible and Intangible Asset?

An asset can by a tangible (physical) asset, or it can be intangible (intellectual property or other rights).

Examples of Assets

The cash in your wallet or your pocketbook is an asset to you because you own it or you control it. The computer or phone you're watching this on is an asset to you. This are both examples of tangible assets. 

An intangible asset might include intellectual property rights (such as a patent, trademark, copyright, etc.). It might also include contractual rights, name recognition, goodwill, etc. 

The most commonly recognized assets in accounting include:

  • Cash
  • Short-term investments
  • Accounts Receivable (owning someone's debt)
  • Supplies
  • Property, Plant, and Equipment

These are resources that are expected to produce some kind of future benefit to the company. The benefit could be cash from an investment or using a vehicle to transport people or goods. 

Related Topics

  • What are Financial Statements? – Financial Accounting
    • Consolidated Financial Statements
  • What is the Income Statement? – Financial Accounting
    • What are Revenues? – Financial Accounting
    • What are Expenses? – Financial Accounting
  • What is the Statement of Retained Earnings – Financial Accounting
  • What is a Balance Sheet? – Financial Accounting
    • Accounting Equation Definition
    • What are Assets? – Financial Accounting
    • What are Liabilities? – Financial Accounting
    • What is Equity? – Financial Accounting
  • What is the Statement of Cash Flow? – Financial Accounting
  • Analysis and Creating Financial Statement 
assets asset

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