An asset is something of value that a company owns, which can include cash, equipment, real estate, or intellectual property, and is used to generate income or provide future benefits.
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Last Updated: December 19, 2025
The term “asset” is one that a lot of people recognize; maybe they’ve encountered it in the business world or in their personal life. But what, exactly, is the definition of the term, and how does an asset impact a small business?
This guide will explain what assets are and why they’re important in the context of owning and operating a business.
According to Merriam-Webster, an asset is an item of value owned by an individual or entity. In the context of a business, an asset can be anything owned by or owed to the company that provides value or a benefit to the business entity.
Assets can be physical, tangible items. However, they do not always have to be. Rather, some assets can be intangible, such as intellectual property rights.
No matter what type of assets a business owns, it’s important to report them on the company’s balance sheets. Doing so will allow the business to more accurately account for its cash flow and overall value.
There are a number of different types of assets. However, two primary categories of business assets include tangible assets and intangible assets.
Tangible assets are classified by their physical existence. Thus, tangible assets are those that can be seen and felt.
Common examples of tangible assets include:
Often, these types of tangible assets can also be categorized as current, or short-term assets, meaning that they can easily be converted to cash or cash equivalents.
Conversely, intangible assets are those that lack any physical existence or attributes. Common examples of intangible business assets include:
While these types of intangible assets may not have any physical attributes, they can nevertheless provide great value to a business.
While assets are items of value for a business, liabilities are essentially the opposite. In short, liabilities are a company’s financial obligations to other people or businesses.
Examples of liabilities for businesses frequently include:
No matter what types of liabilities a business has, a wise business owner will keep careful and meticulous records. Failure to do so can land a business in hot water.
Understanding how assets work and how to keep track of them is crucial to the future success of a business. The business owner who understands and accurately accounts for their assets can manage their capital and cash flow well. This gives the entrepreneur a clear picture of the business’s financial health, enabling them to better prepare for the future.
That said, business accounting can be tricky; there’s no shame in getting help from a professional bookkeeper or accountant.
An asset is any item of value, whether tangible or intangible, that provides some current or future benefit to a business. Small business owners who understand what assets are will be better equipped to understand the overall financial health of their businesses.
Owning and operating a business doesn’t mean that an entrepreneur has to do everything on their own. Many business owners will benefit from having someone in their corner to help make business formation easier.
No matter what an entrepreneur needs or where they are in their business lifecycle, ZenBusiness has the tools and business formation services to help. Learn more about why they’re trusted by entrepreneurs and business owners around the country and see how they can help anyone start, manage, and grow a business today.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
Written by ZenBusiness Editorial Team
The ZenBusiness Editorial Team has more than 20 years of combined small business publishing experience and has helped over 850,000 entrepreneurs launch and grow their companies. The team’s writers and business formation experts are dedicated to providing accurate, practical, and trustworthy guidance so business owners can make confident decisions.
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