Business assets are tangible or intangible items used in business operations for an extended period, including intellectual property. Short-term consumption items like paper and coffee makers do not qualify. Identifying assets is important for taxes and presenting company value to investors.
A business asset is any tangible or intangible asset that is expected to be used in the business operation for an extended period of time. Assets of this type typically include computers and other office equipment, furniture, or buildings. In many areas of the world, intellectual property is also considered a business asset, as that property provides ongoing benefit or use to the business.
Not all items that are purchased for use in a business operation can be properly identified as a business asset. Items intended for short-term consumption are generally excluded from this asset category. This means that items such as copy paper, pens and pencils, toner and ink for printers and fax machines, or envelopes do not qualify as business assets, even though they are used as part of the normal operation of the business. The same is true for items like coffee makers or water coolers; While these items indirectly contribute to employee morale and help increase production, they are not considered actual business assets.
By contrast, a vehicle that is used in the ongoing operation of a business is likely to benefit the business for several years and qualify as a business asset. Similarly, properties such as warehouses where raw materials or finished goods are stored would also count as this type of asset. As for intangible assets, copyrights on trademarks, designs, and other intellectual property generated under the auspices of the company and that have a long-term impact on the business operation would also be considered business assets. Production machinery designed for use over several years also meets the basic definition of a business asset.
Identification of property or other holdings as business assets is often necessary to calculate business taxes. Many nations allow companies to claim a certain amount of depreciation annually on these types of assets. For example, it is often possible to claim depreciation on machinery used in the production of goods and services, as well as vehicles routinely used in the ongoing operation of the business. Assets of this type are also important when presenting the overall value of the company to investors or potential buyers. Corporate raiders also keep a close eye on the number and type of business assets, especially if the idea is to acquire the business, then sell those assets for profit.
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