What is an asset in financial accounting?

In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset).

What is the difference between personal assets and business assets?

Personal assets refer to those owned by an individual, while business assets refer to those owned by a corporation or company. Assets can be physical or intangible, currently available to sell or available for long-term sale, or used for the daily operation of a business.

What is considered a tangible asset?

Mostly tangible assets like cars and homes (personal) or machinery and buildings (business) that are not easily convertible to cash. Often used in the daily operations of running a business or ready for that purpose. Long-term physical assets that have a lifespan of more than one year.

How are assets valued?

Assets can be valued in a few different ways. It's easy to determine the value of assets like stocks, bonds, and your 401 (k) by simply checking their current market prices. For real estate, an appraisal is conducted which is an inspection of the property that also considers how much nearby homes were sold for in the same real estate market.