Accounting

Asset

An asset is anything of economic value you own: cash, investments, real estate, vehicles or loans made to others.

In personal finance it's useful to distinguish productive assets that generate income or appreciate (funds, stocks, rental property) from use assets that meet a need but don't produce income (your home, your car).

Valuation should be conservative and consistent: using the same method every time matters more than getting the exact value right, because what matters is the trend of the series.

Related terms

Liability — A liability is an outstanding payment obligation: a mortgage, personal loan, consumer credit, card balance or debt owed to someone else.
Net worth — Net worth is the difference between everything you own (assets) and everything you owe (liabilities), valued at the same point in time.
Liquidity — Liquidity is how easily an asset can be converted into available cash without losing value.

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Educational content. netclariq does not provide financial, investment, tax or legal advice.