Asset facts for kids

An asset is something valuable that a person, company, or country owns. It can be something you can touch, like a building or money, or something you can't touch, like a good idea or a brand name. Assets are important because they can help you make money or provide a useful service in the future.

What is an Asset?

An asset is anything valuable that someone owns. This could be a person, a business, or even a country. In the world of business and money, an asset's value is usually measured in money. This value is often based on how much money the asset can help you earn in the future. It also considers what has happened with the asset in the past. Knowing an asset's true value helps people decide how best to use it.

Examples of Assets

Assets come in many forms. Some common examples include:

• Money: This is the most direct form of an asset.
• Property: This includes land, buildings, and houses.
• Money owed to you: If someone owes you money, that promise to pay is an asset. This is often called "accounts receivable" in business.

Types of Assets

Assets are usually divided into two main types:

Tangible Assets

These are things you can physically touch and see. They have a physical form.

• Fixed assets: These are things a business owns for a long time. They are used to make products or provide services. Examples include buildings, machinery, and equipment.
• Current assets: These are assets that can be turned into cash quickly, usually within one year. An example is inventory, which means the products a company has ready to sell.

Intangible Assets

These are valuable things that you cannot physically touch. They are often rights or ideas that have value.

• Goodwill: This is the value of a company's good reputation and customer loyalty.
• Patents: These give someone the exclusive right to make, use, or sell an invention for a certain time.
• Trademarks: These are symbols, words, or designs that identify a company or product. Think of a brand logo.
• Copyrights: These protect original works of authorship, like books, music, or art.
• Computer programs: The software itself can be a very valuable asset for a company.

Key Features of Assets

Assets have three important features that make them valuable:

• Future Benefit: Assets should be able to help you in the future. They can directly or indirectly bring in more money. For groups that don't aim to make a profit, assets help them provide services.
• Control: The owner of the asset must be able to control who gets to use or benefit from it.
• Past Event: The event that created the asset must have already happened. For example, you must have already bought the building or created the patent.

See also

In Spanish: Activo (contabilidad) para niños