asset value

In finance, an asset is a resource with economic value that an individual or company owns, with the expectation that it will provide a future benefit. Assets can be tangible, like property or equipment, or intangible, such as intellectual property.1

The value of an asset can be determined in several ways. One method is to calculate what the asset is worth to its owner, based on expected future cash inflows it can generate. This value is influenced by the amount and timing of these cash flows, as well as risk, reflected in the interest rate. Another measure is the fair market value, which is the price an asset could be sold for. In accounting, book value represents an asset's value as recorded on bookkeeping records, often calculated as cost minus depreciation. Companies list their assets on a balance sheet, which follows the fundamental accounting equation: Total assets = Total liabilities + Total owners' equity.231