tangible asset

(noun)

Any asset, such as buildings, land, equipment etc., that has physical form.

Related Terms

Examples of tangible asset in the following topics:

  • Assets

    • In financial accounting, assets are economic resources.
    • Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset.
    • Two major classes are tangible assets and intangible assets .
    • Tangible assets contain various subclasses, including current and fixed assets.
    • Current assets include inventory, while fixed assets include such items as buildings and equipment.

  • Direct and Indirect Measurement

    • When it comes to financial reporting activities, the statement of cash flows is a useful tool when it comes to understanding a business's liquidity and available short-term cash and cash equivalent assets.
    • It is a simpler, more straight forward approach to cash flows, where each line item is a tangible form of cash credit or debit.
    • Cash flows from investing activities, such as the purchase of new equipment and the sale of assets.
    • The indirect method is quite a bit more involved than the direct method, as it incorporates valuation changes in non-cash assets as well.
    • Investment items in the indirect method include capital expenditures and investments (i.e. in securities, other businesses, tangible and intangible assets).

  • The Federal Deposit Insurance Corporation (FDIC)

    • For example, within 90 days of detection, critically undercapitalized FIs with tangible equity of less than 2% of assets must be placed in conservatorship or receivership.

  • Capital Expenditures

    • Capital costs are incurred for the purchase of land, buildings, construction of assets, and equipment, etc., used during business operations.
    • CAPEX include expenses for tangible goods, such as the purchase of plants and machinery, as well as expenses for intangibles assets, such as trademarks and software development.
    • The CAPEX costs are then amortized or depreciated over the life of the asset in question.
    • Repairing an existing asset so as to improve its useful life
    • Capitalized interest, if applicable, is also spread out over the life of the asset.The counterpart of capital expenditure is operational expenditure ("OpEx").

  • Foundations of successful relationships

    • Some examples of measurable mutual goals include sales revenue, return on assets, or some performance indicator of customer satisfaction.
    • Mutual investments, or relationship-specific assets, are the tangible investments and resources that are specific to the relationship in nature.

  • The Prevalence of Small Businesses

    • Goods producers make and sell some sort of physical product or material, while service providers don't make tangible goods.
    • The service industry tends to be more SMB-friendly, as it (generally) requires fewer assets.

  • Owners' Equity

    • Shareholders' equity is the difference between total assets and total liabilities.
    • If liability exceeds assets, negative equity exists.
    • Businesses can be considered, for accounting purposes, sums of liabilities and assets.
    • At first, all the secured creditors are paid against proceeds from assets.
    • Ownership equity includes both tangible and intangible items (such as brand names and reputation/goodwill).

  • Equity Theory

    • The inputs that a participant contributes to a relationship can be either assets (entitling him/her to rewards) or liabilities(entitling him/her to costs).
    • Outcomes can be both tangible and intangible.

  • Product categories

    • For instance, a product can be classified by durability and tangibility.
    • Packaged goods are tangible and are consumed in one or a few uses, such as in the case of beer, soap, or fuel.
    • Durable goods are tangible and survive many uses.
    • Non-durable goods are tangible, but they provide benefits for a short time.

  • Defining the Balance Sheet

    • A standard company balance sheet has three parts: assets, liabilities, and ownership equity.
    • The main categories of assets are usually listed first, and typically in order of liquidity.
    • Assets are followed by the liabilities.
    • The difference between the assets and the liabilities is known as the equity (or the net assets, or the net worth, or capital) of the company, and according to the accounting equation, net worth must equal assets minus liabilities.
    • This balance sheet shows the company's assets, liabilities, and shareholder equity.