![]() ![]() 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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