In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset).[1]The balance sheet of a firm records the monetary[2] value of the assets owned by that firm. It covers money and other valuables belonging to an individual or to a business.[1]
assets
Assets can be grouped into two major classes: tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets.[3] Current assets include cash, inventory, accounts receivable, while fixed assets include land, buildings and equipment.[4]Intangible assets are non-physical resources and rights that have a value to the firm because they give the firm an advantage in the marketplace. Intangible assets include goodwill, copyrights, trademarks, patents, computer programs,[4] and financial assets, including financial investments, bonds, and stocks.
This accounting definition of assets includes items that are not owned by an enterprise, for example a leased building (Finance lease), but excludes employees because, while they have the capacity to generate economic benefits, an employer cannot control an employee.
There is a growing analytical interest in assets and asset forms in other social sciences too, especially in terms of how a variety of things (e.g., personality, personal data, ecosystems, etc.) can be turned into an asset.[9]
Assets are reported on the balance sheet.[11] On the balance sheet, additional sub-classifications are generally required by generally accepted accounting principles (GAAP), which vary from country to country.[12] Assets can be divided into current and non-current (a.k.a. fixed or long-lived). Current assets are generally subclassified as cash and cash equivalents, receivables, inventory, and accruals (such as pre-paid expenses). Non-current assets are generally subclassified as investments (financial instruments), property, plant and equipment, intangible assets (including goodwill) and other assets (such as resources or biological assets).
Current assets are cash and others that are expected to be converted to cash or consumed either in a year or in the operating cycle (whichever is longer), without disturbing the normal operations of a business. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets:
Also referred to as PP&E (property, plant and equipment), these are purchased for continued and long-term use to earn profit in a business. This group includes land, buildings, machinery, furniture, tools, IT equipment (e.g., laptops), and certain wasting resources (e.g., timberland and minerals). They are written off against profits over their anticipated life by charging depreciation expenses (with exception of land assets). Accumulated depreciation is shown in the face of the balance sheet or in the notes.
Intangible assets lack physical substance and usually are very hard to evaluate. They include patents, copyrights, franchises & licenses, goodwill, trademarks, trade names, etc. These assets are (according to US GAAP) amortized to expense over 5 to 40 years with the exception of goodwill.
Tangible assets are those that have a physical substance, such as currencies, buildings, real estate, vehicles, inventories, equipment, art collections, precious metals, rare-earth metals, Industrial metals, and crops. The physical health of tangible assets deteriorate over time. As a result, asset managers use deterioration modeling to predict the future conditions of assets.[13]
Depreciation is applied to tangible assets when those assets have an anticipated lifespan of more than one year. This process of depreciation is used instead of allocating the entire expense to one year.[14]
Tangible assets such as art, furniture, stamps, gold, wine, toys and books are recognized as an asset class in their own right.[15] Many high-net-worth individuals will seek to include these tangible assets as part of their overall asset portfolio. This has created a need for tangible asset managers.
A wasting asset is an asset that irreversibly declines in value over time. This could include vehicles and machinery, and in financial markets, options contracts that continually lose time value after purchase.[16] Mines and quarries in use are wasting assets.[17] An asset classified as wasting may be treated differently for tax and other purposes than one that does not lose value; this may be accounted for by applying depreciation.
For federal tax purposes, digital assets are treated as property. General tax principles applicable to property transactions apply to transactions using digital assets. You may be required to report your digital asset activity on your tax return.
A cryptocurrency is an example of a convertible virtual currency that can be used as payment for goods and services, digitally traded between users, and exchanged for or into real currencies or digital assets.
You add assets through APIs that are exposed by specific AWS constructs. For example, when you define a lambda.Function construct, the code property lets you pass an asset (directory). Function uses assets to bundle the contents of the directory and use it for the function's code. Similarly, ecs.ContainerImage.fromAsset uses a Docker image built from a local directory when defining an Amazon ECS task definition.
When the AWS CDK deploys an app that references assets (either directly by the app code or through a library), the AWS CDK CLI first prepares and publishes the assets to an Amazon S3 bucket or Amazon ECR repository. (The S3 bucket or repository is created during bootstrapping.) Only then are the resources defined in the stack deployed.
In most cases, you don't need to directly use the APIs in the aws-s3-assets module. Modules that support assets, such as aws-lambda, have convenience methods so that you can use assets. For Lambda functions, the fromAsset() static method enables you to specify a directory or a .zip file in the local file system.
If you use Amazon S3 assets directly through the aws-s3-assets module, IAM roles, users, or groups, and you need to read assets in runtime, then grant those assets IAM permissions through the asset.grantRead method.
If you use a module that supports Docker image assets, such as aws-ecs, the AWS CDK manages permissions for you when you use assets directly or through ContainerImage.fromEcrRepository (Python: from_ecr_repository). If you use Docker image assets directly, make sure that the consuming principal has permissions to pull the image.
Farm real estate assets (land and its attachments) is forecast to be $3.39 trillion representing 84 percent of total farm sector assets in 2023. In 2023, real estate assets are forecast to increase by 6.3 percent from 2022 in nominal dollars, accounting for most of the forecast increase in total assets. When adjusted for inflation, real estate assets are forecast to increase by 3.4 percent. Non-real estate assets include the value of investments and other financial assets, inventories of crops, animals, purchased inputs, and machinery/vehicles.
Solvency is a measure of the ability of a farm or ranch operation to satisfy its debt obligations when they are due. Popular measures of solvency include the debt-to-asset ratio and debt-to-equity ratio. Lower values for these ratios are preferred. In 2023, these ratios are expected to go up because debts are forecast to grow at a faster rate than the assets, in nominal dollars. The debt-to-asset ratio is forecast to increase from 13.09 percent in 2022 to 13.22 percent in 2023 while the debt-to-equity ratio is expected to increase from 15.07 percent to 15.24 percent.
Liquidity is the ability to transform or convert assets to cash quickly to satisfy short-term obligations when they are due without a material loss of value or price of the asset. USDA uses several different financial metrics to evaluate farm sector liquidity. One measure is working capital which measures the amount of cash available to fund operating expenses after paying off debt to creditors due within 12 months (current debt). In 2023, working capital is forecast to decrease 11.2 percent relative to 2022 indicating reduced liquidity. Other liquidity measures such as the current ratio and debt service ratio are forecast to worsen in 2023. The current ratio measures the ability of current assets, if sold and converted to cash, to cover current debt obligations. The debt service ratio measures the share of production plus direct Government payments used for debt payments.
The farm sector balance sheet provides a market value estimate and forecast of farm sector assets, debts/other liabilities, and wealth (e.g., equity or net worth) as of December 31. It differs from individual business and corporate balance sheet accounts that are based on historical cost accounting concepts. For example, historical cost-based balance sheets show capital assets, such as farm machinery and equipment, at their original cost less accumulated depreciation. The objective of the farm sector balance sheet is to estimate or forecast the value of assets if sold in today's marketplace.
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Organizations are encouraged to conduct a thorough review of any previous insider incidents or patterns of misconduct that impacted their assets. This process can help to highlight potential vulnerabilities. 2ff7e9595c
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