What Is an Asset?
If you take a look at your company’s balance sheet or the balance sheet example found in our Media Gallery, assets fall into two categories, current and fixed. Think of current assets as something you could turn into cash quickly or within a reasonable amount of time.
Current assets include items such as:
- Accounts Receivables
- Prepaid Expenses
Some financial experts also think of notes receivables as a current asset, but only if the note is a short-term note receivable, say shorter than 60 days, but no more than 90 days.
There are also fixed assets that are considered assets that cannot be readily turned into cash. These include equipment, vehicles, furniture, fixtures, land, and any buildings you own, lease or finance.
Unlike current assets, fixed assets either appreciate in value such as land, or depreciate in value such as vehicles and equipment.