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Types Of Assets

Tangible assets, also referred to as tangible property or inventory, refers to any tangible asset that can be easily converted from one form to another. This is generally compared with non-tangible assets such as bank account or cash, defined as immaterial assets.

Assets that are used mainly to produce income include such tangible assets as business stock, inventories, inventory receivables, machinery and vehicles, fixed assets owned for the purpose of rental or sale, and some other tangible assets that are utilized for personal purposes such as furniture, vehicles and household goods. This may include personal assets (e.g. vehicles and household goods) that are used mainly for personal purposes.

Other assets that are considered intangible assets are trademarks, copyrights and patents. A business’s goodwill is also an intangible asset. Tangible assets include land, buildings, factories, and the inventories on them. Fixed assets include machinery and vehicles, and fixed assets that are commonly referred to as plant and equipment include buildings and plant structures.

There are two types of assets that are classified under the category of tangible assets: capital assets and operating assets. The latter, unlike the first, can be transferred between owners. Capital assets include financial assets (e.g. bank loans, credit cards, etc.)

Non-tangible assets are immaterial in nature. Examples of immaterial assets include human beings, rights to intangible properties, intellectual property rights, public domain, and intangible assets of a business. Some examples of intangible assets include patents, trade secrets and trade names, trademarks, copyrights, titles, and copyrights held by the business. Some immaterial assets, like trade names, are commonly used as corporate or personal names or trademarks, but their value has no monetary value.

Generally, all tangible assets must be valued according to a certain scale and are called costing methods. Costing methods vary from business to business. These methods may use one or more of the following categories of method: first-in-first-out (FIFO), first-in, first-out, or cash methods. Costing methods are used to determine the cost of an item or the quantity of an item in relation to the value of an equivalent in an identical market or process. First-in-first-out or FIFO method uses the cost of production of an item in determining its selling price.

The inventory method involves the measurement of cost for each and every item, its quantity, and cost, and then the value of the whole supply and the value of each item in relation to the market price. Cash method is used to determine the cost per unit of the supply. In either method the cost of a unit of an item is the cost of the product or service produced at its cost in relation to the quantity of the supply available at its price. The use of cost method depends on the type of the product. For example, if a product has a low quality then it will have a high cost to the low quality product will have a low cost.

The intangible asset classification is also used to determine the cost of a product or service by measuring its quality of production. This classification also determines the cost per unit of supply. In addition, the intangible asset classification is used to determine the present value of a product or service.

It is important to note that the cost of production and the cost per unit of supply are different measures and their values can vary. In addition, the present value of a product or service is another way to measure its quality of production. Cost of production refers to the cost of raw material, labor, overhead, distribution, promotion and marketing, and other fixed and variable costs; while cost per unit of supply refers to the value of the product or service sold to the customer or to the market at its wholesale price.

One of the most common types of assets is inventory and the value of inventory is determined by the cost of production of the asset. It should be noted that the inventory can be in the form of cash, inventories, parts, or supplies. {in other words it can be considered as a capital stock. Other examples of tangible assets include land, buildings, machines, machinery, tools, and furniture.

Intangible assets classify the value of a product or service according to its quality of production. Most businesses categorize the cost of production of their products according to the cost per unit of supply. Thus, a tangible asset is one which is of high quality and is required in the production process. An intangible asset is not necessary but is not required for the production of a product.