What Is a Business Asset?

Assets refer to economic resources in monetary terms that are owned or controlled by an enterprise, including various properties, claims and other rights. There are many different classifications of corporate assets based on different criteria. For example, according to liquidity, assets can be divided into current assets and non-current assets. Current assets refer to cash and assets that can reasonably be expected to be realised, sold or consumed within a one-year or more than one-year business cycle. They mainly include monetary funds, short-term investments, receivables and prepayments, inventory, and amortized expenses. And other items. Non-current assets, also known as long-term assets, refer to assets that the company intends to use for long-term production or operations or hold for a certain purpose, including long-term investments (refers to investments that are not intended to be realized within one year, including long-term debt investments, Long-term equity investments and other long-term investments), fixed assets, intangible assets, and other assets (such as long-term deferred expenses). Assets are classified according to their liquidity (that is, the ability to realise and pay for assets): current assets, fixed assets, long-term assets, intangible assets, deferred assets, biological assets, and other assets.

Corporate assets

(I) Assets = Liabilities + Owners' Equity

An enterprise must have a certain amount and type of assets for its production and operation activities, and its internal assets can be seen from two sources:

1. Provided by corporate creditors

2. It is provided by the owner of the enterprise (including the profits that belong to the owner but have not been distributed during the production and operation of the enterprise).

It can be seen that all the assets of the enterprise should belong to the creditors and owners of the enterprise, and they have the right to claim the assets of the enterprise. This claim is called equity in accounting. The part that belongs to the creditor is called the creditor's equity, that is, the liability; the part that belongs to the owner is called the owner's equity.

(II) Revenue-Expenses = Profit

After deducting various expenses incurred from the income obtained by a company within a certain period of time, it will appear as profit. Since the enterprise is set up by investors (shareholders), profits should be owned by investors. Therefore, the profit is shown as an increase in owner's equity. If a loss occurs, it indicates that the owner's equity has decreased.

1. Before closing: assets = liabilities + owner's equity + income-expenses

Assets = Liabilities + Owner's Equity + Profit

2. After closing: Assets = Liabilities + Owners' Equity

Corporate assets

1. Fixed assets are non-monetary assets held by enterprises for the production of products, provision of labor services, leasing, or operation and management that have been in use for more than 12 months, including houses, buildings, machinery, machinery, transportation vehicles, and other and production Equipment, appliances and tools related to business activities.

When calculating the taxable income, the depreciation of fixed assets calculated by the enterprise in accordance with regulations shall be deducted.

2. Do not calculate depreciation-fixed fixed assets.

3. Determination of tax basis for fixed assets.

4. Depreciation of fixed assets calculated using the straight-line method is allowed to be deducted.

5. Except as otherwise provided by the State Council's finance and taxation authorities, the minimum period for calculating depreciation of fixed assets.

6. Expenses incurred by enterprises engaged in the exploitation of mineral resources such as oil and natural gas, and the depletion and depreciation methods of related fixed assets before the commencement of commercial production shall be separately stipulated by the competent department of finance and tax of the State Council.

Productive biological assets

1. Productive biological assets are biological assets held by enterprises for the production of agricultural products, provision of labor services, or leasing, including economic forests, charcoal forests, livestock and service animals.

2. The method of determining the tax base of productive biological assets.

3. Depreciation of productive biological assets calculated using the straight-line method is allowed to be deducted.

4. Minimum period for calculating depreciation of productive biological assets.

Corporate assets

1. Deduction of amortization expenses of intangible assets.

In calculating the taxable income, the amortization expenses of intangible assets calculated by the enterprise in accordance with the regulations may be deducted. However, the following intangible assets shall not be deducted from the calculation of amortization expenses: intangible assets for which self-developed expenses have been deducted in calculating taxable income; self-made goodwill; intangible assets unrelated to operating activities; assets.

2. The method of determining the tax base of intangible assets.

3. Amortization expenses calculated on the straight-line method for intangible assets are allowed to be deducted. Expenditures on outsourced goodwill are allowed to be deducted when the enterprise is transferred or liquidated as a whole.

4. The amortization period of intangible assets shall not be lower than 10 years. As an investment or transfer of intangible assets, if the useful life is stipulated in relevant laws or contracts, it may be amortized according to the stipulated or agreed life.

Long-term deferred expenses of corporate assets

In calculating the taxable income, the expenses stipulated by the relevant laws of the enterprise shall be regarded as long-term deferred expenses and amortized in accordance with the relevant provisions.

Corporate assets investment assets

During the period of an enterprise's overseas investment, the cost of the investment assets shall not be deducted when calculating the taxable income.

Corporate asset inventory

The use or sale of inventory by an enterprise shall be allowed to be deducted when calculating the taxable income in accordance with the provisions of the inventory cost.

(VII) Asset loss