What are active assets?

Active assets are assets that are used daily to contribute to generating income for the company. In a simple example of active assets, someone who owns a mustard company would consider a building used for production together with a device used to prepare and pack mustard as an active assets. Similarly, the recipe for the company's mustard would be an active asset, although it is not a tangible assets, because it is also used daily to make money for business. Depending on the nature of the asset, they may appreciate or depreciate value. For example, the property of the property tends to appreciate value over time, while production equipment is depreciated with time and use. The accountant can determine whether the assets should be considered active and how they should be appreciated.

The characteristic of an active asset is that it plays a function in the current of business income. It can be a property, physical equipment or something like a patent or copyright. Loss of asset could potentially disrupt the subne functionKnocking until it can be replaced. The company must also work to maintain asset to continue to be functional and useful, and expenditure related to the maintenance of the asset would be considered commercial expenses for accounting and taxation.

Depending on business, the nature of the active asset can vary very much. Active assets may include things such as trucks, Earth movement equipment, tools, production equipment, structures, computers and other electronics and equipment such as kitchens, furnaces and workshops. If the asset can be shown daily as part of working with income production, it is considered an active asset.

This therm should not be confused with an investment strategy known as an active allocation of assets. Although these two terms are similar, they deal with very different types of assets. In the case of active asset allocation, the asset moves in the portfolio to deal with the change of conditionNO on the market with the aim of maximizing returns. This can be done by an individual or brokerage acting on behalf of an individual or institution that wants to use investment to generate funds for different purposes, from pension accounts to scholarships.