Business Assets: Definition & Examples

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  • 0:01 Business Assets Defined
  • 1:50 Examples of Business Assets
  • 4:11 Lesson Summary
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Lesson Transcript
Instructor: Aaron Hill

Aaron has worked in the financial industry for 14 years and has Accounting & Economics degree and masters in Business Administration. He is an accredited wealth manager.

Learn what business assets are, and find out some of the most common assets that companies have on their balance sheets in this lesson. Also, learn about some of the different ways that these assets are categorized.

Business Assets Defined

Part of running or operating a successful business requires that you first have the right assets in place to produce your product or provide your service. If you owned a home, for example, you would need a lawn mower, weed trimmer, leaf blower, fertilizer, and a pair of gloves to keep your lawn in good shape. Likewise, a business needs the right tools or assets to properly run and succeed.

Business assets are property or equipment that a company owns that are primarily used for running the business. When someone goes to get a business loan from a bank, they are usually getting the loan to help pay for the business assets they need to purchase.

From an accounting perspective, business assets are listed on a company balance sheet and usually depreciate over the time of the useful life that a company expects to use the asset. Assets are not typically fully expensed in the year they are purchased. For example, if a company bought a machine for $20,000 that was expected to last 20 years, they would deduct 1/20th ($1,000) of the cost annually for the next 20 years on their income statement.

It is important to note that business assets are sometimes classified as tangible or intangible. Tangible assets are things that you can usually see and touch, such as equipment or office furniture. Intangible assets can be even more important and valuable to a company. These assets are harder to measure and not necessarily something you can feel and touch.

Things like a company's reputation and brand awareness are intangible assets and can make a company very valuable. Think of how valuable brand names like Nike, BMW, or Under Armour are to consumers. The value in the business' name and what it stands for is an intangible asset that can be worth millions! Let's take a look at some common business assets.

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