Assets

Assets are often defined as an economic resource, which is owned by the corporation and expected to provide future benefits to its operation.  Accounting rules allow assets to take two forms:

• Tangible Assets - These are assets that have a physical form, such as a building or a piece of machinery
• Intangible Assets - These assets usually involve a legal right or claim, such as a patent.

The calculation of assets is as follows:

Assets = Liabilities + Owner's Equity

Assets are usually recorded on the balance sheet at their historical cost. This is not necessarily the value at which the assets could be sold.