In simple terms, anything that you own and has an economic value is an asset. If you're running a company, the resources that you have to run the company are called assets. Assets can be broken down into the following 6 types:
1.) Current Assets - Anything that can be easily converted into cash can be classified into this category. Examples of assets in this category include stock holdings, inventory, short-term investments, marketable securities, fixed deposits, the balance in your business’s checking and savings accounts, bills receivable, and prepaid expenses. As this type of asset can be quickly turned into cash, it’s also often termed “liquid assets.”
2.) Fixed Assets - Also known as long-term assets or non-current assets, these are things that are of a fixed nature because they cannot be easily converted into cash and often require complex procedures and a significant amount of time before you can have their cash value in hand. For instance, fixed assets would encompass things like land, real estate, machinery and equipment, and furniture.
3.) Tangible Assets - As the name implies, tangible assets are those assets that you can see and touch. This can include items that may also be referred to as current or fixed assets. For instance, cash, which is a current asset, is also a tangible asset because it’s something you can physically touch. Most fixed assets are also tangible assets for the same reason. Land, real estate, machinery, equipment, and furniture are things you can see and touch.
4.) Intangible Assets - These are the opposite of tangible assets, and include any assets that are, well, not tangible. Examples of intangible assets include things like franchise agreements, patents, brands, trademarks, and copyrights.
5.) Operating Assets - These are things that a company uses to produce its product or service and can include fixed and current assets, as well as tangible and intangible assets. Some of the most common items included in this category are cash, a company’s bank balance, inventory, and operating machinery.
6.) Non-Operating Assets - Non-operating assets are those that are not critical for a company to provide its product or service, but which are nevertheless essential to establish and run a business. For example, many intangible assets fall into this category, such as brands, trademarks, and patents.