Assets are good – they are always good. I cannot objectively think of any situation where assets are anything BUT good. An Asset is basically anything that generates wealth for your business (or yourself) that you own. Note that the key word here is “wealth”, not “money”, but “wealth”. This is because money, as in cold, hard cash is, an asset as well – because money, as any savvy businessperson will tell you, can be used to make more money (hence generating more wealth).
So, examples of assets can include:
- A printing machine that prints stuff for you in a printing business
- A vehicle that you use to transport goods and services
- Any amounts owed to you by your customer
- Any money you have in your bank account (or in hand)
- The property in which you conduct your business
But what about people? Surely people are our greatest asset, right?
Well, yeah, I do agree with you on a conceptual level but, hey I’m not a HR professional – I’m an Accountant and as far as accounts are concerned, people are not assets. They might generate more wealth for your business (through their work) but let’s be clear here: employees don’t belong to you! This is important from both an accounting and being a decent business owner perspective.
Know everything you need to know about Assets, Liabilities and Equity? Head on here pard’ner!