What is an asset?
An asset is a resource with financial value that an individual, organization or nation owns or manages with the foresight that it will provide future value. Assets are listed on a corporation’s balance sheet and are purchased or created to enhance a firm’s profits and help the firm’s operations. An asset can be conceived of as something that, in the long term, can generate cash flow, reduce costs or improve sales whether it’s manufacturing equipment or a patent. For an asset to be valuable, a company must maintain a right to it as of the date of the financial records. A business resource is a rare tangible or intangible material that can provide an economic advantage by generating cash inflows or reducing cash outflows. Assets can be generally classified into current assets or short-term assets, fixed assets, financial investments (long-term), and intangible assets.