In accounting, what exactly do we mean when we talk about “Assets?”

In accounting, what exactly do we mean when we talk about "Assets?"

In the context of accounting for finances, “Assets” are resources that are in the possession of the entity. It does not matter whether the asset in question is tangible or intangible; what matters is that it can be owned and assigned a value. as well as being owned by a company or organization that is capable of producing positive economic value. can say, without much difficulty, that assets represent values that can be turned into cash. (Despite the fact that cash is also regarded as an asset.)

The chart of accounts (COA) that is typically used includes the assets. The chart of accounts is broken down into five distinct sections, which are as follows:

Asset category
Debt category
Owner’s equity category
Income category
Expense category

How many types of assets are there (Types of Assets) ?

Current Assets

Non-Current Assets

Intangible Assets

Current assets are cash assets. Or it can be converted to cash within 1 period of business or 1 year. In other words, assets that are easily and quickly converted to liquidity, such as cash, bank deposits or other assets. that can be quickly converted into cash such as inventories, bills of receipt, trade accounts receivable, etc.

Non-Current Assets are assets that cannot be exchanged for cash as quickly as possible. This type of assets will not be converted to cash within 12 months, such as land, buildings, machinery, etc.

What are non-current assets?

Land, Building and Equipment: (Property Plant and Equipment – PPE)
Long-term investments: (Non Current Investments)
Long-term receivables: (Non Current Receivables)

Intangible Assets means Accounting Standard No. 38 defines intangible assets as identifiable non-monetary assets. and has no physical characteristics The following conditions must be met: 1. Must be able to identify 2. Must be under the control of the business 3. Must bring economic benefits in the future 4. Measure costs reliably If any item does not meet the above conditions to be considered as expenses immediately except for transactions arising from a business combination Such items shall be treated as goodwill to be recognized at the date of purchase (FAP. under the Royal Patronage of His Majesty the King, 2020). Examples of intangible assets are

Goodwill
Patents
Trademarks, brand names (trade names)
Leaseholds
Computer software
Copyright
Customer’s list
License
Relationship with customers or with the seller (customer relationship), etc.