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Tangible and intangible assets

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Assets are everything a company owns. Tangible assets are physical; they include cash, inventory, vehicles, equipment, buildings and investments. Intangible assets do not exist in physical form and include things like accounts receivable, pre-paid expenses, and patents and goodwill.

To understand the value of an asset, it’s important to understand its potential long-term benefits. Often, intangible assets are of greater long-term value than tangible assets because tangible assets are used up more quickly. For example, the patent for a new technology could continue to generate money for decades, while the products based on that patent might have value in inventory for only a short time.

More about tangible and intangible assets

The balance sheet below shows how ABC Company values its various assets.

par value of shares

Related definitions

Find out more in our glossary

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