The total amount of money held at the bank by a person or company, either in current or deposit accounts. It is included in the balance sheet under current assets.
Stocks, bonds, mutual funds, bank deposits, investment accounts, and good old cash are all examples of financial assets. They can have a physical form, like a dollar bill or a bond certificate, or be nonphysical—like a money market account or mutual fund.
A bank account may be an asset or a liability to the bank. For example, if the account incurs fees paid to the bank, it would be an asset, but if it is a savings account that accrues interest, then it would be a liability since the bank would owe this interest.
Assets are the economic resources belonging to a business. Assets could be money in a cash register or bank account, or items such as property, fixtures and furniture, equipment, motor vehicles, and stock or goods for resale.
If you're calculating your net worth, you should tally your assets first. Include any money you have in the bank as well as the value of your investments. Include your property value and the worth of your car if you were to sell it, along with any monthly payments you might receive from a pension or retirement plan.
Key takeaways
The three main asset types are equities (stocks), fixed income (bonds) and cash.
Assets are things you own that have value. Your money in a savings or checking account is an asset. A car, home, business inventory, and land are also assets. Each program has different rules about what counts as an asset and the total value of your assets allowed to qualify for assistance.
If you have money in your checking account, it's considered an asset. If your account is empty or overdrawn, it's not considered an asset, but rather a liability. On a small-scale example, let's say a checking account holder just has two checking accounts.
A car is a depreciating asset that loses value over time but retains some worth. Because you can convert a vehicle to cash, it can be defined as an asset.
In order to distinguish between an expense and an asset, you need to know the purchase price of the item. Anything that costs more than $2,500 is considered an asset. Items under that $2,500 threshold are expenses. Let's say your business spent $300 on a printer and $3,000 on a copier last year.
Credit Cards as Liabilities
The balance owed on a credit card can be treated either as a negative asset, known as a “contra” asset, or as a liability. In this article we'll explore the optional method of using liability accounts, however, there are several advantages to using the Contra Asset Approach.
Given the financial definitions of asset and liability, a home still falls into the asset category. Therefore, it's always important to think of your home and your mortgage as two separate entities (an asset and a liability, respectively). Finally, your house is your home.
Personal assets are things of present or future value owned by an individual or household. Common examples of personal assets include: Cash and cash equivalents: Certificates of deposit (CDs); checking, savings, and money market accounts; physical cash; and Treasury bills all are examples.
Checking accounts and savings accounts are typically considered assets, since they have a positive financial value. They represent accessible money that is part of your personal wealth and can be used as you like.
Assets are things you own that have value. Assets can include things like property, cash, investments, jewelry, art and collectibles. Liabilities are things that are owed, like debts. Liabilities can include things like student loans, auto loans, mortgages and credit card debt.
“The main drawback of a CD is that it's an illiquid asset unless you're willing to pay the early withdrawal penalty," said McHugh. “On the other hand, the funds are FDIC insured and you're guaranteed a specific rate of return."
Your 401(k), and any other retirement accounts, are financial assets. These are portfolios in which you hold securities and investment products with either realized or potential value. This makes your 401(k) portfolio an asset in your name as long as you own the account and as long as it has a positive balance.
a contractual claim to something of value; modern economies have four main types of financial assets: bank deposits, stocks, bonds, and loans. In reality, there are many more types of financial assets (like derivatives, calls, puts, and so on), but you only need to know the basics of these four types for this course.
The death benefit of a life insurance policy is not considered an asset, but some policies have a cash value, which is considered an asset. Only permanent life insurance policies, like whole life, can grow cash value.
Your three greatest assets are your time, your mind, and your network. Each day your objective is to protect your time, grow your mind, and nurture your network.
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).
Assets include both tangible and intangible economic, social, or productive resources, which can constrain or enable women and girls' empowerment. Our model locates financial and productive assets, knowledge and skills, social capital, and time, within the sphere of assets.