This is any resource that is owned by an individual or business. It has future economic value, potentially creating cashflow for the individual or business. Ultimately, they help to increase the firm's value. It is also something that can be converted to cash.
An asset is a part of the balance sheet and found on the left hand side. When it comes to investing along with running a business, the ratio of assets to liabilities is something that many watch.
According to the formula on a balance sheet:
Assets = Liabilities + equity
Types of Assets
- Current: cash, inventory, accounts receivable
- Fixed: land, building equipment
- Financial Assets: stocks, bonds, derivatives
- Goodwill, patents, copyrights, software
This is an asset that loses value over time. It can be vehicles and machinery. This is treated differently for tax purposes. These require the introduction of depreciation to the financial accounting.
Since the introduction of the Internet, digital assets have garnered attention. These can be classified as intangible although it is likely they get their own category as they grow in popularity. This is likely since the digital world is only growing.
Obviously the starting point is cryptocurrency. There are many different forms of this, with others emerging as time passes. They are:
- coins - assets directly tied to a blockchain
- tokens - assets on a particular blockchain but created via a smart contract
- non-fungible tokens (NFTs) - individual assets that are unique
Digital assets are projected to become popular within gaming. This field is already accustomed to in-game tokens and assets. However, they tend to be tied directly to a specific game with not value outside of it. When the game is shut off, the assets disappear.
The next generation of this, under the heading of Web 3.0, is going to allow these assets to be swapped on exchanges. This means that wallet systems operate outside the specific games. It is likely that digital assets become a commodity that ends up in multiple games.