Assets areanythinga companyowns thatcanbringitfinancialbenefits in
thefuture.Assetscanbetangible (e.g.real estate,machinery)orintangible (e.g.copyright, patent). The divisionofassetsisveryimportantforanycompany,because itallows youtoassesswhichelements areworthpayingspecialattention to.
Assets – what are they? Definition of the term
Assets areanything that hasvalue andcanbeintended forfurtheruse.
Thevalue ofassetscan becalculatedbased on theirmarketprice.Assetscanbetangibleorintangible.Examples oftangibleassetsare:machinery,buildings,land,naturalresources;examples ofintangibleassetsare:copyrights,patents,know-how.Assetsare thebackbone ofanybusiness –withoutthemit is difficult toimagine theoperationofa company.
With theirhelp,goodscan beproduced andservicescan be provided,andrevenuecan be generated.Byinvesting inassets,a companyseeks toincreaseitsvalue andexpanditsbusiness. Thevalue ofassetsisvariable – theycanlosevalueorincrease. Thisis due tovariousfactors,suchas themarketsituation (e.g.economiccrisis),politicaldecisions (e.g.introduction ofnewregulations)orenvironmentalconditions (e.g.drought).Therefore,it isimportanttomakeappropriateinvestments andmonitor the marketsituation –thenyou canavoid losses andbenefit fromchanges in themarket.
Types and characteristics of assets
Assets areanyavailableresourcesthatcanbeused forspecificpurposes.We candivide them intoseveralmaintypes:
– physicalassets: these arematerials andtoolsthatcan beused toproduceothergoodsorservices (e.g.,machinery,buildings);
–financialassets: these arecashandotherfinancialinstrumentsthatcan beused forbusinesspurposes (e.g., cash,bonds,shares incompanies);
– Non-financialassets: areanyotherresourcesthatcanbringbusinessbenefits (e.g.,know-how,brand,customer relationships).
Eachtype ofasset hasitsowncharacteristics andadvantages,soit isimportanttoselect themappropriately foryourbusiness.