Assets

Assets are resources owned by a business that are expected to produce future cash flows which give an economic benefit.

They are comprised of current assets and non-current assets.

Current assets are expected to be used up or converted into cash within a year. Non-current assets are, therefore, not expected to.

Current Assets

Current Assets comprise of cash, Inventory and Accounts Receivable.

Cash

Cash is money available for immediate use in business operations.

Non-current Assets

Non-current assets are not expected to be used up or converted into cash within one year.

Non-current Assets include:

• Tangible/Fixed assets
• Property, plant and equipment (PPE), which include land, equipment, machinery, buildings
• Intangible assets including patents, trademarks, brands and goodwill
  • Brand is an intangible asset representing the value of a company's name, reputation, and customer recognition in the market.

Life of an asset

The accounting life of an asset refers to the period over which the asset is depreciated for accounting purposes.

The economic life of an asset refers to the actual period over which the asset is expected to be productive.