Asset:
The asset is a thing or resource owned by any person, organization, or country with the expectation that it will generate surplus/benefit in monetary value in the future.
“Assets are future economic benefits, the rights of which are owned or controlled by an organization or individual”- Finney &Miller
“Assets are valuable resources owned by a business which are acquired at a measurable money cost”
– Prof. R.N. Anthony
Popular examples of assets are as follows:
• Inventory
• Plant
• Machinery
• Vehicles
• Cash deposit
• Cash on hand
• Commercial paper
• Land
• Saving accounts
• Bonds
• Brand recognition
• Blueprints
• Distribution rights
• Copyrights
• Goodwill
• Franchise agreements
• Music compositions
• Permits
• Trademarks etc.
Classification of Asset:
Generally, assets are classified into three types according to their nature which is highlighted below:
1. Convertibility Assets:
This asset is classified based on convertibility to cash. Convertibility assets are further categorized into two types:
i)Current Assets:
Assets that are easily converted to cash in the short-term (less than one year) are considered as Current Assets. Examples of current assets are as follows:
• Cash
• Inventory
• Office supplies
• Short-term deposit
• Marketable securities
• Account receivable
• Bank balance
• Prepaid expenses
• Debtors etc.
ii)Fixed Assets:
Assets that are held for long-term (more than one year) and provide benefits to the organization for several years. It is also known as long-term assets. Examples of fixed assets are as follows:
• Building
• Land
• Long-term investments
• Vehicles
• Equipment
• Patents
• Trademarks
• Machinery
• Plant
2. Physical Existence:
These assets are classified based on their physical existence. Assets with Physical existence are further categorized into two types:
i.Tangible Assets:
Assets that have physical existence and can be seen, touched, and felt are defined as Tangible Assets. Examples of tangible assets are as follows:
• Plant
• Building
• Machinery
• Equipment
• Inventory
• Market securities
• Cash
ii. Intangible Assets:
Assets that are absent in physical form or the assets that cannot be seen, touched and felt are defined as Intangible Assets. Examples of intangible assets are as follows:
• Trademarks
• Brand
• Goodwill
• Patents
• Copyright
• Permits
• Trade secrets
• License etc.
3. Usage:
Those assets which are classified based on their usages or persistence are known as assets by their usages. Assets according to their usage are further categorized into two types:
I.Operating Assets:
Operating assets are those types of assets, which are required and used for day to day operation of any organization. Examples of operating assets are as follows:
• Cash
• Bills receivables
• Inventory
• Plant
• Equipment
• Copyrights
• Goodwill etc.
II.Non-Operating Assets:
Non-operating assets are those type of assets, which are not required for day-to-day operation but keeps generating revenue for the long term. Examples of Non-Operating Assets are as follows:
• Interest income from a fixed deposit
• Short-term investments
• Marketable securities
• Idle cash
• Idle equipment
• Vacant land etc.
https://examples.yourdictionary.com/examples-of-assets.html
https://corporatefinanceinstitute.com/resources/knowledge/accounting/types-of-assets/
https://gocardless.com/guides/posts/assets-in-accounting/#:~:text=When%20we%20speak%20about%20assets,of%20a%20fixed%2C%20tangible%20asset.
https://corporatefinanceinstitute.com/resources/knowledge/accounting/types-of-assets/
https://enskyar.com/Blogs/Classification-of-Assets-and-Liabilities
https://www.accountingtools.com/articles/what-is-asset-classification.html
https://www.toppr.com/guides/accounting-and-auditing/preparation-of-final-accounts-of-sole-proprietor/classification-of-assets-and-liabilities/
https://www.vedantu.com/commerce/classification-of-assets-and-liabilities