What is a physical asset?

Physical asset, also known as a tangible asset, is an object that is value. Physical assets are tangible things that are valuable in themselves or that create value for the owner. This differs from intangible assets that are of value but do not have a physical presence. An example of a physical asset is a car; It is a physical object that can be touched and which has a clear value. Intangible asset is something like a patent that protects mental property and therefore helps generate profits, but cannot be physically solved.

For accounting purposes, physical assets are considered part of the company value. Over time, the physical asset will reduce the value, and this can be considered a tax deduction. If the company must be liquidated, physical assets can be sold to quickly raise funds to pay creditors. Intangible assets are sometimes easy to sell, for example, when the company holds shares in another, while in other cases there, there may be a demanding value and sell; Patents JSOut, an example of something that can be difficult to appreciate fairly.

Inventory, real estate, equipment and cash are examples of physical asset. They are considered part of the total business value and must be documented on financial statements and in account books. If businesses sell or merges, part of the process includes a fair value of business that includes the value of all physical assets held by the company. Businesses that go to the default settings must also be appreciated to determine how much money can be obtained for creditors from auction of physical asset.

physical assets such as equipment, depreciated or decrease in value, during their lives. This occurs as a result of wear and also as the asset becomes outdated; For example, a physical asset as a computer will quickly overcome the next generation of products. Depreciation is considered a loss for business and as such isannounced for tax documents and other trade papers. Finally, the depreciated assets need to be replaced, which represents additional business costs. Maintenance of physical assets is another type of asset expenditure that businesses can spend.

Some businesses may have relatively few physical assets. A company that offers a service such as consulting can only have assets such as the office equipment used in the company's work. Other companies such as manufacturers may have considerable physical assets in the form of real estate, factories, equipment used in production, etc.