Asset (general definition) - Financial definition
Concise definition of the term asset
In finance, the term asset refers to any resource with economic value that an individual, company, or country owns or controls, capable of generating future cash flows or providing other benefits.
Comprehensive definition of the term asset
In finance, an asset encompasses a broad range of tangible and intangible resources, including cash, securities, real estate, equipment, intellectual property, and more. These assets serve as building blocks for investment portfolios, balance sheets, and economic activities, with investors and companies strategically allocating resources to optimize returns, manage risks, and achieve financial objectives.
For instance, in investment management, assets under management (AUM) represent the total value of assets managed by a financial institution, while in accounting, assets are classified as current or non-current depending on their liquidity and expected holding period. Additionally, assets play a crucial role in financial markets, where they are bought, sold, and traded to capitalize on market inefficiencies, exploit arbitrage opportunities, and hedge against risks.