Assets

Published Friday 24 July 2026

Table of contents

• What are assets in accounting?
• Types of assets
• Keep track of your business assets with Xero
• FAQs on assets
• Related terms
• Learn more about assets

Key takeaways

• Assets are the resources your business owns, including cash, equipment and intangibles like patents
• They're the opposite of liabilities and sit in the accounting equation: assets = liabilities + equity
• The main types are current, fixed, tangible and intangible assets
• The more your assets exceed your liabilities, the more your business is worth

Knowing what counts as an asset helps you see what your business owns and what it's really worth. The section below sets out a plain definition and a few everyday examples.

What are assets in accounting?

Assets are the resources owned by a business. They're the opposite of liabilities, which are the things your business owes. Assets can include property, equipment, cash, accounts receivable, inventory and raw materials. They also cover intangible items such as trademarks, patents, royalties and intellectual property.

Assets sit in the accounting equation: assets = liabilities + equity. The more your assets exceed your liabilities, the more your business is worth. Tracking what you own is a core part of everyday small business bookkeeping and accounting.

Take a plumber running a small business. Their assets might include:

• the building they work from, if they own it
• inventory and spare parts
• equipment and tools
• cash in the bank and money owed by customers

Assets fall into a few main categories. Knowing the difference helps you record them and report their value correctly.

Types of assets

Most assets fit into one of these four categories:

• current assets: cash and anything you can turn into cash within a year, such as inventory
• fixed assets: long-term items you use to run the business, such as property and machinery
• tangible assets: physical things you can touch, such as stock and equipment
• intangible assets: non-physical items such as trademarks, patents and intellectual property

Fixed assets lose value over time, which you record as accumulated depreciation. You can also group assets as operating or non-operating, depending on whether you use them in your day-to-day trading.

Clear asset records make it easier to see your true financial position at any moment.

Keep track of your business assets with Xero

Xero accounting software helps you record and track your assets in one place, so you always know where your business stands and can plan your next move with confidence. For definitions of other accounting terms, browse more terms in the glossary.

FAQs on assets

Here are answers to frequently asked questions about assets.

What are examples of assets?

Examples include cash, inventory, equipment and property, along with money your customers owe you. Less obvious ones include prepaid expenses and long-term investments your business holds.

What is the difference between current and fixed assets?

Current assets can be converted to cash within a year, while fixed assets are held and used over the long term. This distinction affects where each one appears on your balance sheet.

Is cash an asset?

Yes, cash is a current asset because you can spend it straight away. It's often listed first on the balance sheet, as it's the most liquid asset you hold.

Related terms

• Liabilities
• Current vs fixed assets

Learn more about assets

• Manage fixed assets in Xero
• Bookkeeping and accounting basics
• Small business guides