What are assets?

Assets are defined as valuable resources or items owned by an individual or a company that can provide future economic benefits. This category includes a wide range of tangible and intangible goods such as cash, real estate, vehicles, stocks, and intellectual property. Essentially, assets represent what an individual or company possesses that can be utilized for financial gain or to cover liabilities.

In contrast, loans taken by a company represent liabilities, which are obligations to repay borrowed funds. Obligations to pay others are also liabilities, and they are not considered assets, as they do not contribute to the wealth of the entity. Future earnings from investments can be anticipated as potential income, but they do not qualify as assets in the current sense because assets must be actual resources owned at the present time. Thus, the definition of assets is clearly captured in the choice that identifies them as things owned.