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[Robert Kiyosaki] 4 Assets that make people Rich
[Robert Kiyosaki] 4 Assets that make people Rich
Published: 2017/02/17
Channel: Success Resources
The $7 Asset Everyone Can Afford
The $7 Asset Everyone Can Afford
Published: 2017/04/13
Channel: Bones Rodriguez
What is an Asset?
What is an Asset?
Published: 2015/08/24
Channel: Phil Town's Rule #1 Investing
Yellow Claw & Tropkillaz - Assets feat. The Kemist [Official Full Stream]
Yellow Claw & Tropkillaz - Assets feat. The Kemist [Official Full Stream]
Published: 2013/09/26
Channel: Mad Decent
Why and How to Build Assets? - Fast Business Skills
Why and How to Build Assets? - Fast Business Skills
Published: 2015/02/02
Channel: Hooman Mardox
Assets vs  Liabilities With Examples!
Assets vs Liabilities With Examples!
Published: 2017/03/10
Channel: Reaching Success
ASSET - WE KNEW (ไม่บอกก็รู้) | Pupe BNK48 Original Fan Song
ASSET - WE KNEW (ไม่บอกก็รู้) | Pupe BNK48 Original Fan Song
Published: 2018/04/25
Channel: Q Q
Robert Kiyosaki and 3 types of Assets
Robert Kiyosaki and 3 types of Assets
Published: 2009/02/25
Channel: Yuri Nicolau
Accounting Basics 3- Assets
Accounting Basics 3- Assets
Published: 2008/01/11
Channel: SusanCrosson
Vinograd: Trump an asset of the Russian government
Vinograd: Trump an asset of the Russian government
Published: 2018/07/15
Channel: CNN
Yellow Claw & Tropkillaz - Assets (feat. The Kemist)
Yellow Claw & Tropkillaz - Assets (feat. The Kemist)
Published: 2013/10/26
Channel: Wagner Souza
Biometrix - Assets
Biometrix - Assets
Published: 2018/05/14
Channel: Trap Nation
The Asset Flip (The Jimquisition)
The Asset Flip (The Jimquisition)
Published: 2015/05/25
Channel: Jim Sterling
building assets
building assets
Published: 2015/10/01
Channel: Kishan Devraj
THINK ASSETS THAT CAN GENERATE POSITIVE DAILY PASSIVE CASH-FLOW - 24/7, 365.
THINK ASSETS THAT CAN GENERATE POSITIVE DAILY PASSIVE CASH-FLOW - 24/7, 365.
Published: 2015/07/04
Channel: Borislav Sapunov
What is Asset? Expense? Capital? Liability? Income?????
What is Asset? Expense? Capital? Liability? Income?????
Published: 2017/06/01
Channel: DIGESHSHALA
ASSET VS. LIABILITY
ASSET VS. LIABILITY
Published: 2017/09/21
Channel: The Rich Dad Channel
20 TIP: How to Create a Passive Income Asset with Pat Flynn
20 TIP: How to Create a Passive Income Asset with Pat Flynn
Published: 2015/08/18
Channel: Preston Pysh
HOW TO CONVERT A LIABILITY INTO AN ASSET- LESSONS WITH ROBERT KIYOSAKI, RICH DAD POOR DAD
HOW TO CONVERT A LIABILITY INTO AN ASSET- LESSONS WITH ROBERT KIYOSAKI, RICH DAD POOR DAD
Published: 2018/03/30
Channel: The Rich Dad Channel
Coinbase Exposed: 5 New Asset List is a Ripple XRP Attack
Coinbase Exposed: 5 New Asset List is a Ripple XRP Attack
Published: 2018/07/15
Channel: Jungle Inc
ASSET - ตู้เพลง (モバイル) |  Fan Song
ASSET - ตู้เพลง (モバイル) | Fan Song
Published: 2018/02/10
Channel: Q Q
Types of Asset Classes for Investing
Types of Asset Classes for Investing
Published: 2012/04/13
Channel: Zions TV
Career Insights: Asset Management with Dhruv
Career Insights: Asset Management with Dhruv
Published: 2017/09/07
Channel: Crimson Education
What is asset and liability?
What is asset and liability?
Published: 2018/01/07
Channel: Don't Stop Learning
Robert Kiyosaki -  Assets vs Liabilities
Robert Kiyosaki - Assets vs Liabilities
Published: 2008/10/30
Channel: aposwil
assets and liabilities explained in hindi , liablity meaning and asset meaning in hindi
assets and liabilities explained in hindi , liablity meaning and asset meaning in hindi
Published: 2017/11/26
Channel: Patshala
Talent Is An Asset (The Jimquisition)
Talent Is An Asset (The Jimquisition)
Published: 2018/01/08
Channel: Jim Sterling
Jason Bourne - Bourne vs. the Asset Scene (10/10) | Movieclips
Jason Bourne - Bourne vs. the Asset Scene (10/10) | Movieclips
Published: 2017/01/20
Channel: Movieclips
What is Asset Management?
What is Asset Management?
Published: 2013/11/19
Channel: Schroders
How To Get Rich - Assets vs Liabilities
How To Get Rich - Assets vs Liabilities
Published: 2016/05/01
Channel: News Galaxy
5 FREE Assets in Unity 2018!
5 FREE Assets in Unity 2018!
Published: 2018/02/21
Channel: Sykoo
Asset vs. Share Purchase - How to Sell a Business How to Buy a Business - David C Barnett
Asset vs. Share Purchase - How to Sell a Business How to Buy a Business - David C Barnett
Published: 2016/08/07
Channel: David Barnett
Basic Accounting Terms (Video-1) What are Assets? (Part-1)
Basic Accounting Terms (Video-1) What are Assets? (Part-1)
Published: 2014/11/12
Channel: SUDHIR SACHDEVA
Understanding Asset Classes (Hindi)
Understanding Asset Classes (Hindi)
Published: 2015/12/10
Channel: TempletonIndia
Michael Rapaport: Carmelo Anthony can be an asset in Houston | NBA | UNDISPUTED
Michael Rapaport: Carmelo Anthony can be an asset in Houston | NBA | UNDISPUTED
Published: 2018/07/10
Channel: Skip and Shannon: UNDISPUTED
Introduction to Fixed Assets Process
Introduction to Fixed Assets Process
Published: 2013/06/09
Channel: TechnoFunc
MY BABY SISTER USED HER BIG ASSET TO SNATCH MY HUSBAND1- 2018 nigeria movie latest nollywood movies
MY BABY SISTER USED HER BIG ASSET TO SNATCH MY HUSBAND1- 2018 nigeria movie latest nollywood movies
Published: 2018/04/21
Channel: 123 Movies Nigerian Movies African Movies
Handmade Hero Day 464 - Applying Asset Types and Tags to Imported PNGs
Handmade Hero Day 464 - Applying Asset Types and Tags to Imported PNGs
Published: 2018/07/15
Channel: Handmade Hero
Asset Management: Industry Overview and Careers in Asset Management
Asset Management: Industry Overview and Careers in Asset Management
Published: 2015/08/27
Channel: 365 Careers
IPO: HDFC Asset Management : Apply or Avoid: Details Analysis Pre & Post Listing
IPO: HDFC Asset Management : Apply or Avoid: Details Analysis Pre & Post Listing
Published: 2018/07/15
Channel: Equity 2commodity
SC Asset x THE TOYS
SC Asset x THE TOYS 'Say Hi บ้านหลังใหม่' (Official MV)
Published: 2018/06/21
Channel: scassetonline
ASSET X NAP THE KID - มองตา [M/V]
ASSET X NAP THE KID - มองตา [M/V]
Published: 2018/02/27
Channel: LIT Nation
How to use the Asset Store - Unity Official Tutorials
How to use the Asset Store - Unity Official Tutorials
Published: 2015/05/29
Channel: Unity
Mystery Asset Analysis. Why..? Because the asset does not matter [07/12/2018]
Mystery Asset Analysis. Why..? Because the asset does not matter [07/12/2018]
Published: 2018/07/12
Channel: TradeDevil
Real Estate Outlook: A More Attractive Asset?
Real Estate Outlook: A More Attractive Asset?
Published: 2018/07/06
Channel: MilkenInstitute
And Marlon Stockinger
And Marlon Stockinger's choice as Pia Wurtzbach's best asset is...
Published: 2018/07/11
Channel: PEP
Deferred Tax Asset & Deferred Tax Liability (Basic Understanding, Tax Vs Financial Accounting)
Deferred Tax Asset & Deferred Tax Liability (Basic Understanding, Tax Vs Financial Accounting)
Published: 2013/06/27
Channel: Allen Mursau
Asset Disposal
Asset Disposal
Published: 2014/06/25
Channel: Mindset Learn
Asset Revaluation - Basics
Asset Revaluation - Basics
Published: 2014/08/22
Channel: Robert Czernkowski
Revision: Asset Disposal
Revision: Asset Disposal
Published: 2013/09/10
Channel: Mindset Learn
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WIKIPEDIA ARTICLE

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In financial accounting, an asset is an economic resource. Anything tangible or intangible that can be owned or controlled to produce value and that is held by a company to produce positive economic value is an asset. Simply stated, assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset).[1]

The balance sheet of a firm records the monetary[2] value of the assets owned by that firm. It covers money and other valuables belonging to an individual or to a business.[1] One can classify assets into two major asset classes: tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets.[3] Current assets include inventory, while fixed assets include such items as buildings and equipment.[4]

Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the marketplace. Examples of intangible assets include goodwill, copyrights, trademarks, patents and computer programs,[4] and financial assets, including such items as accounts receivable, bonds and stocks.

Formal definition[edit]

An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity[5] (Framework Par 49a).

Characteristics[edit]

One of the most widely accepted accounting definitions of asset is the one used by the International Accounting Standards Board.[6] The following is a quotation from the IFRS Framework: "An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise."[7]

This means that:

  • The probable present benefit involve a capacity, singly or in combination with other assets, in the case of profit oriented enterprises, to contribute directly or indirectly to future net cash flows, and, in the case of nonprofit organizations, to provide services;
  • The entity can control access to the benefit;
  • The transaction or event giving rise to the entity's right to, or control of, the benefit has already occurred.

Employees are not considered assets like machinery is, even though they can generate future economic benefits. This is because an entity does not have sufficient control over its employees to satisfy the Framework's definition of an asset. Resources that are expected to yield benefits only for a short time can also be considered not to be assets, for example in the USA the 12 month rule excludes items with a useful life of less than a year.

Similarly, in economics an asset is any form in which wealth can be held.

There is a growing analytical interest in assets and asset forms in other social sciences too, especially in terms of how a variety of things (e.g. personality, personal data, ecosystems, etc.) can be turned into an asset.[8]

Accounting[edit]

In the financial accounting sense of the term, it is not necessary to be able to legally enforce the asset's benefit for qualifying a resource as being an asset, provided the entity can control its use by other means.

The accounting equation is the mathematical structure of the balance sheet. It relates assets, liabilities, and owner's equity:

Assets = Liabilities + Capital (which for a corporation equals owner's equity)
Liabilities = Assets − Capital
Equity = Assets − Liabilities

Assets are listed on the balance sheet. On a company's balance sheet certain divisions are required by generally accepted accounting principles (GAAP), which vary from country to country.[9] Assets can be divided into e.g. current assets and fixed assets, often with further subdivisions such as cash, receivables and inventory.

Assets are formally controlled and managed within larger organizations via the use of asset tracking tools. These monitor the purchasing, upgrading, servicing, licensing, disposal etc., of both physical and non-physical assets.

Current assets[edit]

Current assets are cash and other assets expected to be converted to cash or consumed either in a year or in the operating cycle (whichever is longer), without disturbing the normal operations of a business. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets:

  1. Cash and cash equivalents – it is the most liquid asset, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, cheque, bank drafts).
  2. Short-term investments – include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities).
  3. Receivables – usually reported as net of allowance for non-collectable accounts.
  4. Inventory – trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the "lower of cost or market" rule.
  5. Prepaid expenses – these are expenses paid in cash and recorded as assets before they are used or consumed (common examples are insurance or office supplies). See also adjusting entries.

Marketable securities: Securities that can be converted into cash quickly at a reasonable price.

The phrase net current assets (also called working capital) is often used and refers to the total of current assets less the total of current liabilities.

Long-term investments[edit]

Often referred to simply as "investments". Long-term investments are to be held for many years and are not intended to be disposed of in the near future. This group usually consists of three types of investments:

  1. Investments in securities such as bonds, common stock, or long-term notes.
  2. Investments in fixed assets not used in operations (e.g., land held for sale).
  3. Investments in special funds (e.g. sinking funds or pension funds).

Different forms of insurance may also be treated as long term investments.

Fixed assets[edit]

Also referred to as PPE (property, plant, and equipment), these are purchased for continued and long-term use in earning profit in a business. This group includes as an asset land, buildings, machinery, furniture, tools, IT equipment, e.g., laptops, and certain wasting resources e.g., timberland and minerals. They are written off against profits over their anticipated life by charging depreciation expenses (with exception of land assets). Accumulated depreciation is shown in the face of the balance sheet or in the notes. An asset is an important factor in a balance sheet.

These are also called capital assets in management accounting.

Intangible assets[edit]

Intangible assets lack of physical substance and usually are very hard to evaluate. They include patents, copyrights, franchises, goodwill, trademarks, trade names, etc. These assets are (according to US GAAP) amortized to expense over 5 to 40 years with the exception of goodwill.

Websites are treated differently in different countries and may fall under either tangible or intangible assets.

Tangible assets[edit]

Tangible assets are those that have a physical substance, such as currencies, buildings, real estate, vehicles, inventories, equipment, art collections, precious metals, rare-earth metals, Industrial metals, and crops.

Depreciation is applied to tangible assets when those assets have an anticipated lifespan of more than one year. This process of depreciation is used instead of allocating the entire expense to one year.[10]

Tangible assets such as art, furniture, stamps, gold, wine, toys and books have become recognized as an asset class in their own right[11] and many high-net-worth individuals will seek to include these tangible assets as part of their overall asset portfolio. This has created a need for tangible asset managers.

Comparison: current assets, liquid assets and absolute liquid assets[edit]

Current assets Liquid assets Absolute liquid assets
Stocks
Prepaid expenses
Bills receivable Bills receivable
Cash in hand Cash in hand Cash in hand
Cash at bank Cash at bank Cash at bank
Accrued incomes Accrued incomes Accrued incomes
Loans and advances (short term) Loans and advances (short term) Loans and advances (short term)
Trade investments (short term) Trade investments (short term) Trade investments (short term)

See also[edit]

References[edit]

  1. ^ a b O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, New Jersey: Pearson Prentice Hall. p. 272. ISBN 0-13-063085-3. 
  2. ^ J. G. Siegel, N. Dauber & J. K. Shim, The Vest Pocket CPA, Wiley, 2005.

    There are different methods of assessing the monetary value of the assets recorded on the Balance Sheet. In some cases, the Historical Cost is used; such that the value of the asset when it was bought in the past is used as the monetary value. In other instances, the present fair market value of the asset is used to determine the value shown on the balance sheet.

  3. ^ J. Downes, J. E. Goodman, Dictionary of Finance & Investment Terms, Barron's Financial Guides, 2003
  4. ^ a b J. Downes, J. E. Goodman, Dictionary of Finance & Investment Terms, Barron's Financial Guides, 2003; and J. G. Siegel, N. Dauber & J. K. Shim, The Vest Pocket CPA, Wiley, 2005.
  5. ^ IFRS for SMEs. London: IASB (International Accounting Standards Board). 2015. p. 14. ISBN 978-0-409-04813-1. 
  6. ^ "IFRS". Iasb.org. Retrieved 8 October 2017. 
  7. ^ "IFRS" (PDF). Iasb.org. Retrieved 8 October 2017. 
  8. ^ Birch, Kean (2016-08-10). "Rethinking value in the bio-economy: Finance, assetization and the management of value". Science, Technology, & Human Values. 42 (3): 460–490. doi:10.1177/0162243916661633. 
  9. ^ Intermediate Accounting, Kieso, et. al
  10. ^ [citation needed]
  11. ^ Downes, John; Goodman, Jordan Elliot. Finance and Investment Handbook, Sixth Edition, Barron's Educational Series, Inc., 2003.

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