Asset Terms: Definitions, Classifications, and Examples
Explore accounting terms related to assets, including current and noncurrent assets, cash, receivables, inventory, prepaid expenses, property and equipment, intangible assets, depreciation, amortization, impairment, valuation, contra-asset accounts, and balance sheet presentation.
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Search for asset definitions and related accounting topics published on Accountant Compass.
Asset Terms Learning Path
Follow this sequence to understand asset definitions, classifications, measurement, and reporting.
Understand Assets
Learn what qualifies as an asset and how economic resources create future benefits.
What Is an Asset? →Classify the Asset
Identify current, noncurrent, tangible, intangible, operating, and financial assets.
Explore Asset Classifications →Measure the Asset
Study cost, carrying amount, fair value, depreciation, amortization, and impairment.
Explore Asset Measurement →Report the Asset
Understand balance sheet presentation, disclosures, contra accounts, and related ratios.
Explore Asset Reporting →Major Asset Classifications
Assets may be grouped by liquidity, physical form, use, or measurement basis.
Current Assets
Resources expected to be realized, sold, or used during the operating cycle or within the short term.
Noncurrent Assets
Resources expected to provide benefits beyond the operating cycle or short-term reporting period.
Tangible Assets
Assets with physical substance, including cash, inventory, land, buildings, equipment, and vehicles.
Intangible Assets
Identifiable nonphysical resources such as patents, trademarks, copyrights, licenses, and software.
Browse Asset Terms by Category
Use these collections to find related asset definitions and explanations.
Cash and Liquid Assets
Cash, cash equivalents, restricted cash, marketable securities, and short-term investments.
Explore Cash Terms →Receivable Terms
Accounts receivable, notes receivable, allowance accounts, bad debts, and collection terms.
Explore Receivable Terms →Inventory Terms
Merchandise, raw materials, work in process, finished goods, valuation, and write-downs.
Explore Inventory Terms →Prepaid and Other Current Assets
Prepaid expenses, supplies, deposits, short-term advances, and other current resources.
Explore Prepaid Asset Terms →Property, Plant, and Equipment
Land, buildings, machinery, equipment, vehicles, furniture, and construction in progress.
Explore PP&E Terms →Intangible Asset Terms
Patents, copyrights, trademarks, licenses, software, goodwill, and amortization.
Explore Intangible Terms →Investment Asset Terms
Debt securities, equity securities, long-term investments, fair value, and unrealized changes.
Explore Investment Terms →Asset Valuation Terms
Historical cost, carrying amount, book value, fair value, recoverable amount, and impairment.
Explore Valuation Terms →Essential Asset Terms
Start with these commonly used asset definitions.
Asset
A present economic resource controlled by an entity as a result of past events.
View Definition → CCurrent Asset
An asset expected to be realized, sold, or used within the operating cycle or short term.
View Definition → NNoncurrent Asset
An asset expected to provide benefits beyond the operating cycle or short-term period.
View Definition → CCash and Cash Equivalents
Cash and highly liquid short-term investments readily convertible to known cash amounts.
View Definition → RRestricted Cash
Cash subject to contractual, legal, or other limitations on its use.
View Definition → AAccounts Receivable
Amounts customers owe for goods or services provided on credit.
View Definition → AAllowance for Doubtful Accounts
A contra-asset account estimating receivables that may not be collected.
View Definition → IInventory
Goods held for sale, in production, or used in producing goods and services.
View Definition → PPrepaid Expense
A payment recorded as an asset until the related future benefit is consumed.
View Definition → PProperty, Plant, and Equipment
Long-lived tangible assets used in operations rather than held for resale.
View Definition → DDepreciation
The systematic allocation of a depreciable asset’s cost over its useful life.
View Definition → AAccumulated Depreciation
A contra-asset account containing cumulative depreciation recognized to date.
View Definition → IIntangible Asset
An identifiable nonmonetary asset without physical substance.
View Definition → GGoodwill
An acquisition-related asset representing benefits not separately recognized.
View Definition → AAmortization
The systematic allocation of a finite-lived intangible asset’s cost over time.
View Definition → IImpairment
A reduction recognized when an asset’s carrying amount is not recoverable or exceeds its recoverable amount.
View Definition → BBook Value
The carrying amount of an asset after related valuation adjustments and contra accounts.
View Definition → FFair Value
A market-based measurement used for selected assets and liabilities.
View Definition → CCapital Expenditure
Spending that acquires or improves a long-term asset and is generally capitalized.
View Definition → CContra Asset
An account that reduces the carrying amount of a related asset account.
View Definition → TTangible Asset
An asset with physical substance that may be used, held, or sold.
View Definition →Connect Every Asset Term to Measurement and Reporting
Asset definitions become more useful when connected to classification, initial cost, subsequent measurement, depreciation or amortization, impairment, contra-asset accounts, balance sheet presentation, disclosures, and related financial ratios.
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Frequently Asked Questions About Asset Terms
What is an asset in accounting?
An asset is a present economic resource controlled by an entity as a result of past events and expected to provide economic benefits.
What is the difference between current and noncurrent assets?
Current assets are expected to be realized, sold, or used during the operating cycle or short term. Noncurrent assets are expected to provide benefits beyond that period.
What is the difference between tangible and intangible assets?
Tangible assets have physical substance, while intangible assets represent identifiable nonphysical rights or resources such as patents and software.
What is a contra-asset account?
A contra-asset account reduces the balance of a related asset. Common examples include accumulated depreciation and the allowance for doubtful accounts.
Where are assets reported?
Assets are reported on the balance sheet and are commonly grouped into current and noncurrent classifications, with additional details provided in the notes.
Continue to Liability Terms
After learning how economic resources are classified and measured, continue with Liability Terms to study payables, accruals, loans, bonds, leases, taxes, payroll obligations, and other present obligations.
Continue to Liability Terms