What are assets?

If you want your business to grow you must increase your assets. They represent the current profit and the profit you can potentially make later on. Of course it is normal that when you start a business you do not have a large amount of assets.

They are the goods and rights that an individual, organization or business owns, and from which it obtains or expects to obtain a benefit, thus increasing its equity value. They can be tangible and intangible and can be liquidated in the short or long term.

Your assets are also collateral and you can use them to back loans if you need capital for your business. It is not a decision to take lightly because if you are unable to meet your payment obligations you may lose them. It is better to look for financing options that provide unsecured loans so you do not risk your assets.

What are assets for?

Just as important as growing assets is keeping track of them and accounting for them. They will allow you to:

• Know the financial health of your business (along with liabilities).

• Determine the value of your business.

• Perform all your operations with good performance.

• Apply for loans and credits, as well as contracts and insurance.

• Increase your cash flow by liquidating assets if you urgently need cash and ultimately a liquidation of your business.

Tangible and intangible assets

Assets can be tangible and intangible.

Tangible assets are physical assets that can be touched and are used in the day-to-day operations of the business.

Examples are: premises, land, furniture, equipment, vehicles, raw materials, finished products, machinery, etc.

Intangible assets: assets without physical presence but equal or more valuable than tangible assets. Like tangible assets, they can be either acquired or created by the company.

Examples: intellectual property such as patents, formulas, copyrights and computer programs; as well as royalties, brand value, procedures, contractual obligations and shares, among others.

Types of assets

Assets are classified into fixed assets (non-current or non-current), current assets (or current assets) and are fundamentally separated according to their capacity to be transformed into cash within a given period of time. They can be tangible, intangible and investments.

Investments we make in other companies, real estate investments to obtain income and deferred taxes can also be assets.

Fixed assets are long-term assets and rights that cannot be liquidated, i.e. transformed into cash, before one year. Over time they may gain value or depreciate in value, a factor that is also taken into account in finance.

Its description may be different depending on the type of business and the function it performs, i.e. whether it is used directly in the production and sale of the product/service. They can be real estate, machinery, furniture, patents, shares and bonds in other companies, etc.

Current or current assets: are the goods and rights that remain in the b