2. any interest in real/personal property that can be used to pay off debts.
3. any resource that can either: (a) generate revenue; or (b) reduce expenses.
EXAMPLE:
Jane wants to borrow a sizeable amount of money to build a summer house in the mountains. Although banks are generally unwilling to lend money for such projects, they will lend to Jane because she has substantial assets (including ownership of several buildings and a large number of stocks). Such assets are generally pledged as collateral. With respect to real property, Jane might give the bank a mortgage as a form of collateral.Assets appear as one of three major balance sheet categories and are counterbalanced by liabilities and net assets. In corporations, net assets are usually referred to as shareholder’s equity (or book value).
- CURRENT ASSETS
- for accounting purposes, property that can be easily converted into cash – such as marketable securities; accounts receivable (goods/services sold-but-not-yet-paid-for); and inventories (raw materials, works-in-progress, finished goods intended for future sale).
- FIXED ASSETS
- in accounting, property used for production of goods/services (eg, plant & machinery; buildings; land;, mineral resources; etc.).
