An asset is a resource owned or controlled by a person, company, or institution that has measurable economic value. It is expected to deliver a future benefit through income, a rise in value, use in operations, or conversion into cash.
Assets split into current and non-current. Current assets, such as cash, inventory, and accounts receivable, are expected to be used or turned into cash within one year. Non-current assets, such as property, equipment, and long-term investments, hold value over a longer horizon. Assets are also classed as tangible or intangible, where tangible assets are physical resources and intangible assets such as patents and goodwill are not.
An asset is the opposite of a liability: an asset is something owned that holds economic value, while a liability is something owed, such as a loan or an unpaid bill. The difference between a company's total assets and its total liabilities is its equity, the net value left for its owners.
A company owns USD 50,000 in cash, USD 100,000 in inventory, and USD 300,000 in equipment.
Each item is an asset, because it holds economic value and supports the business.
The cash and inventory are current assets, while the equipment is a non-current asset.