Asset
As per the dictionary meaning of ‘asset’- it is basically, something of any value. In finance, the core meaning remains the same however, it comes along with a slight variation. An asset may be defined as the the things which are either owned or leased out and may be used to generate some price in present or future, as per the needs of the beholder.
Examples of assets as per the beholder
Assets may depend on, the person who owns it, it may be a person or an organization. Accordingly, the assets can be individual assets or organizational assets.
Individual assets examples
- Flat
- Car
- Jewellery
Organizational assets examples
- Machinery
- Office
- Building or a business site
In case of organizational assets, they can be tangible and intangible as well. Tangible can be any land, building, machinery etc.Intangible can be labour (skilled, unskilled, semi-skilled).
Need of assets
Assets are used basically, either as a security or as a mortgage.
The following two situation will make it clear
Suppose a person does not have enough income to buy a loan which he needs urgently, so he can mortgage his any precious asset (land or any valuable property) or thing, in layman language, and get the loan. He can get it back after paying the money later. This can also be adopted in case of peer-to-peer lending but cautiously.
So, assets can be used at the time of need or as per the requirement. They truly prove to be an asset for banking sector and humans as well.
