Different types of business assets
Assets are resources that your business owns or leases that provide economic value - for example cash, equipment or intellectual property.
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?
In business terms, an asset is a resource of value that you own or lease that helps you run your business. These resources can be tangible items such as computers and petty cash, or non-physical things such as goodwill, reputation and brand.
In accounting terms, assets 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 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 operating on non-operating based on their usage.
List of business assets
Here are some examples of the different types of assets businesses commonly have. Note this list is non-exhaustive and many more types of assets are possible.
Examples of current assets
- cash/cash equivalents
- receivables
- deposit accounts
- money orders
- cheques
- bank drafts
- marketable securities
- investments (short term)
- inventory
- stock
- prepaid expenses
Examples of fixed assets
- property
- plant
- equipment
- tools and machinery
- furniture
- investments (long-term)
Examples of tangible assets
- cash
- stock
- buildings
- land
- office equipment
- machinery
- vehicles
Examples of intangible assets
- intellectual property
- trade secrets
- licences
- franchises
- reputation
- brand
- goodwill
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.