Meaning of Asset
Meaning of Assets
mean the resources and articles under control of work unit which is the result of the past event and expected to be useful in economic term in the future to work unit, business, owner and company; Or
means valued entity or nonentity belonged by the person or business or enabled to deem to exploit the benefit from the title of movable property, immovable property, right of claim, acquired value, expense causing right, and expense of the next accounting period.
Therefore, assets in accounting mean money or both tangible and intangible article with monetary value belonged by the natural person or store for investment in business operation.
From such meaning, several natures of assets in accounting are as follows.
Monetary asset or money equivalent such as cash and note receivable.
Asset which is right of claim such as receivable.
Tangible assets such as property, plant and equipment.
Intangible assets such as patent, copyright, and franchise.
Expenses paid and useful for next accounting period such as different types of prepaid expenses.
Assets can be classified into 3 types as follows.
- Current Assets mean cash or other assets that the company may sell or
convert into cash or used up within 1 year period such as cash, bank deposit, draft, posted cheque, short-term investment, note receivable, receivable, etc.
Prepaid Expense means the amount of cash or cash equivalents firstly paid out by the business for asset or service that will gain the benefit in the future.
Deferred Material and Equipment means consumable material which is current asset of the business upon purchasing and using up in short-term period such as paper, stationery and office materials.
- Fixed Assets mean the assets that are available by the company for use in operation, having permanent and durable nature and more than 1 year useful life.
Fixed Assets can be classified into 2 types.
- Tangible Fixed Asset includes property, plant, equipment, machinery, vehicle, office equipment, etc.
- Intangible Fixed Asset is untouchable or intangible and usable for the company’s operation with monetary value such as:
- - Computer program (software) for use in management, quality control, production and internal management.
- - Trademark is the right granted in trademark utilization or name that is solely and permanently defined.
- - Patent is the right granted from the government in entry to use form invention.
Copyright is the right granted from the government in publishing, sale or utilization from art, music, literature and others.
- - Franchise is the right granted by the business in marketing of any type of product or service.
- - Goodwill is the value derived from takeover in the price higher than present price.
- - Leasehold is the right in utilization from leased asset as agreed or determined in contract.
- - Business Organization Cost is the expense available in business organization
- Other Assets mean the assets that may not be classified into current assets or fixed assets such as long-term investment, unit trust, mutual fund, land that is not available for operation, land available for waiting to utilize in the future, and deferred expenditure or expense, etc.