Microsoft word checklist templates free6/19/2023 This type of asset is also referred to as liquid assets. This refers to the type of assets that can easily be converted into money or cash equivalents (mostly within a year). Alternatively, this concept can also classify assets into short-term and long-term assets. When you classify assets basing on their Convertibility into cash, you classify them as either current assets or fixed assets. Usage: This is the classification of assets basing on their use in a business operation.Ĭlassification of Assets According to Convertibility.Convertibility: Assets are classified based on how easy they are to be converted into cash.An investment can be tangible or intangible. Physical existence: This is the classification of assets basing on their physical existence.Resource: Assets are necessary resources that one can use to generate future economic benefits.Īssets are classified in three ways: they are:.This means that they can be sold or exchanged. Economic value: Every asset has a monetary value.Ownership: They represent ownership that, at a later stage, can be turned into cash and cash equivalents.There exist three crucial properties of assets. Below are the most common types of assets: Classification of Assets According to UsageĪssets exist in many forms.Classification of Assets According to Physical Existence. Classification of Assets According to Convertibility.
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