Assets are fundamentally defined as resources a company has which can be converted into cash when needed. Anything that has a positive economic value is considered an asset. These can be of two types: tangible and intangible assets.

Tangible assets

These are physical assets that include cash, inventory, investment, buildings, lands, vehicles, equipment, etc. Some of these assets, such as buildings, lands, vehicles, and equipment, add value to your business but can't be easily converted into money.

Intangible assets

These don't exist in a physical form. These include accounts receivable, prepaid expenses (stocks), patents, copyrights, trademarks, etc. These add value to the company by helping it generate more income in the future.

Assets reduce expenses, generate cash flow, or improve sales. These are shown in the balance sheet of the company.