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Facts About Business Assets

Business assets, or, as the IRS calls them, "property," are items of value owned by a business. Assets come in several types, from cash to land and buildings. Every business needs assets to operate; without assets like furniture, machinery, or vehicles, you can't run your business. Here are 10 things every business owner needs to know about assets. Just to know that you can use transition words and phrases in your essay when writing.

 

1) Assets Can Be Tangible or Intangible

The two broadest categories of business assets are those that are tangible and those that are not. Assets can be real, or tangible, like a car or a computer you use for business, or retail shelving. They can also be intangible, like intellectual property (trademarks, copyrights, patents).

One interesting asset is your business's goodwill. It's your good reputation, sometimes expressed in the value of your loyal customers. Goodwill is generally calculated as the difference between the purchase price of a company and its fair market value. You can also pay someone to write my paper if you are an understudy of business.

2) Assets Are Treated Differently for Tax and Accounting Purposes

For Accounting Purposes

You business assets are shown on the business balance sheet. The assets are listed according to their liquidity, which is a term relating to the ease of transferring the asset to cash because cash is the most "liquid" asset. Cash is listed first as the most liquid asset, then other current assets, and then fixed assets.

Current assets, including cash, accounts receivable, and inventory, are most quickly converted to cash. Fixed assets, like property and buildings, are less liquid and less easily converted to cash.2

For Tax Purposes 

The IRS distinguishes between assets (property) depending on whether or not they can be expensed or depreciated.

Expensing an asset means taking the tax deduction for it in the first year after you buy it. The cost of current assets and low-cost fixed assets are usually expensed. For example, you can take the entire cost of a cell phone in the first year. Search write my paper and you will find shocking writers to write regarding this matter.

Depreciation is an annual deduction from your business taxes to recover the cost of an asset over a certain number of years (the asset's useful life).

You can depreciate tangible property and some intangible property, like patents, copyrights, and computer software, if:

  • You own the asset
  • You use it for business purposes
  • It has a useful life that can be determined, and
  • It must be expected to last for more than one year. 3

Real property (land and buildings) cannot be depreciated, while personal property can be depreciated. The process of figuring out how to depreciate assets is called depreciation. If you have to find writer to write essay for me on business , find writers onine.

Listed property is a special kind of business asset. These are assets that can be used for both personal and business purposes, so the IRS keeps a close eye on them. Types of listed property:

  • Passenger autos,
  • Other property used for transportation, and
  • Property used for entertainment, recreation, and amusement (including cameras and recording devices).4

The IRS has detailed limits and rules about deducting and depreciating business property, including recovery periods (useful life) of different kinds of assets and different depreciation methods. See IRS Publication 946 How to Depreciate Property for more information.

As noted above, some assets can be depreciated; these are called depreciable assets. Depreciation of assets is an important bookkeeping and tax concept, because depreciation is an expense that can lower the value of an asset and accelerated depreciation can bring tax benefits. Have you ever mentioned that a writer write my essay on business, if not look at it for business essay.

Some assets must be amortized, which is similar to depreciation for certain kinds of intangible assets. Many intangibles are amortized over a 15-year period with no salvage value at the end of this period. 3