Different types of business assets
Business assets are items of value that your business owns, creates or benefits from. Assets can range from cash, raw materials and stock, to office equipment, buildings and intellectual property.
What is an asset in business?
An asset, in business terms, is a resource of value that you own or lease that helps you run your business. These can be tangible items such as computers and petty cash, or non-physical things such as goodwill, reputation and brand.
Assets, in accounting terms, are resources that you can sell or convert into cash or use to produce value. For example, your inventory, bank balances, accounts receivable, prepaid expenses, etc.
Assets accounts are an important factor in your business' balance sheet. Depending on how you look at them, assets can fall into different categories.
Categories of business assets
You can generally categorise assets according to their nature and type. Based on their convertibility into cash, you can classify assets as either:
- current assets - those with a shorter life span and easily transferable into cash
- fixed assets - intended for long-term use and unlikely to convert quickly into cash
Another way of grouping business assets is according to their physical characteristics. Under this approach, you can distinguish between:
- tangible assets - the physical, material and financial resources of your business
- intangible assets - resources without material substance, but with clear business value
You can also label business assets as either operating on non-operating based on their usage.
List and examples of business assets
Intellectual property, including trade marks, patents, copyright and designs)
For a successful business, you should ideally own a combination of current, tangible and intangible assets to secure a good cash flow, effective processes and long-term value. See more on the importance of assets in business.