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The Business Assets

Assets are economic resources that are owned by a business and are expected to benefit the future operations. In most cases, the benefit to future operations comes in the form of positive future cash flows. The positive future cash flows may come directly as the asset is converted in to cash (collection of receivable) or indirectly as the asset is used in operating the business to create other assets that result in positive future cash flows (building, and land used to manufacture a product for sale). Assets may have a definite physical form such as buildings, machinery, or an inventory of merchandise. On the other hand, some assets exist not in physical or tangible form, but in the form of valuable legal claims or right; examples are amounts due from customers, investments in government binds and patent rights.