Business glossary
Asset
A resource controlled by a business that is expected to provide future economic value.
Example
A business owns a work van, holds $3,000 in cash and is owed $800 by a customer. Each can be an asset, although they differ in liquidity, useful life and how they are measured.
How it differs from related terms
An asset describes a resource; an expense describes a cost recognized during a period. Buying long-lived equipment is not necessarily the same as immediately recording its full price as an expense.
Frequently asked questions
What is an example of asset?
A business owns a work van, holds $3,000 in cash and is owed $800 by a customer. Each can be an asset, although they differ in liquidity, useful life and how they are measured.
How should asset be interpreted?
An asset describes a resource; an expense describes a cost recognized during a period. Buying long-lived equipment is not necessarily the same as immediately recording its full price as an expense.