Assets
Accounting glossary · Understand, connect, apply
An asset is a resource or right controlled by an entity because of past events that can provide economic benefits. Cash, receivables, inventory and equipment are common examples.
Example
A business buys a computer for $800 cash. Equipment rises by $800 and cash falls by $800, leaving total assets unchanged.
Remember the difference
Legal ownership is not the only test: control matters. Not every valuable idea or employee skill qualifies for recognition.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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