Simply Business homepage
  • Business insurance

    • Business Insurance FAQs

    Business insurance covers

  • Support
  • Claims
  • Sign In
Call Us0333 0146 683
Chat With UsChat support 24/7

What is an asset? A quick guide to business assets

2-minute read

Sam Bromley

Sam Bromley

16 March 2023

Share on FacebookShare on TwitterShare on LinkedIn

What is an asset? Every business needs them to operate but it's not always clear what is, and isn't an asset. Here’s a quick guide to business assets, which can be categorised in different ways.

What are company assets?

Business or company assets are valuable items that your business owns. Business assets include cash, investments, equipment, and even your business’s reputation.

It’s important to understand assets, as they play an important role in business accounting. For example, when creating a balance sheet to understand your business’s financial position, you’ll need to list business assets (and business liabilities).

The first step is to list everything that your business owns, from desks to data.

Then you usually categorise business assets and separate them into different types. Here’s a guide to the different categories.

Get small business guides and news straight to your inbox

Your email address will be used by Simply Business so that we can send you the latest guides, offers and tips. You can unsubscribe from these emails at any time. For more information, check out the Simply Business privacy policy.

Current assets and fixed assets

One way of categorising business assets is by current assets and fixed assets. This is what you’ll usually see on a balance sheet.

What are current assets?

A current asset definition is a business asset that has a short life span (less than a year) and can be easily converted into cash.

A good example therefore is cash itself, which is readily available and continually flows in and out of your business.

Other current assets include:

  • accounts receivable (what you’re owed for products or services already delivered)
  • deposit accounts
  • cheques
  • bank drafts
  • short-term investments
  • prepaid expenses (goods and services you’ve paid for, to be received in the future)

What is a fixed asset?

A fixed asset definition is a business asset that has value over a longer life span (more than a year) and can’t be easily converted into cash.

A good example of a fixed asset is property, which you usually own for the longer-term. Property doesn’t give easy access to cash either.

Fixed assets depreciate in value over time, during the course of their life. This should be accounted for on a balance sheet (for example, under the heading less accumulated depreciation).

Other fixed assets include:

  • plant (e.g. facilities and infrastructure)
  • equipment
  • tools and machinery
  • furniture
  • leasehold improvements (enhancements made to a space by a business tenant)
  • long-term investments

Tangible assets vs intangible assets

Another way of categorising business assets is by separating them into tangible and intangible assets. These depend more on their physical attributes rather than their life span.

You might separate assets into tangible and intangible assets if you want to value your business.

What is a tangible asset?

A tangible asset definition is a physical asset that your business owns. These assets include cash, vehicles and equipment, as well as:

  • stock
  • buildings
  • land
  • machinery
  • investments

What is an intangible asset?

An intangible asset definition is an asset that isn’t physical, yet still has clear business value.

Tangible assets often have a clear and finite value, but it can be more difficult to value intangible assets. Methods involve forecasting the after-tax cash flow the asset is expected to produce, or working out how much it cost to develop the asset.

Intangible assets include your business’s:

More useful articles for small business owners

Photograph 1: mavoimages /

Would you like to know more about business assets? Let us know in the comments below.

Are you protecting your business?

As the UK's biggest business insurance provider, we understand the importance of protecting your interests. Why not take a look now and build a quick, tailored business insurance quote?

Start your quote
Sam Bromley

Written by

Sam Bromley

Sam has more than 10 years of experience in writing for financial services. He specialises in illuminating complicated topics, from IR35 to ISAs, and identifying emerging trends that audiences want to know about. Sam spent five years at Simply Business, where he was Senior Copywriter.

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

Find this article useful? Spread the word.

Share on Facebook
Share on Twitter
Share on LinkedIn

Keep up to date with Simply Business. Subscribe to our monthly newsletter and follow us on social media.

Subscribe to our newsletter


HomePopular articlesGeneral businessGuestInsuranceLandlordLandlord resourcesLegal and financeMarketingNewsOpinionProperty maintenanceTradesmanCovid-19 business support hub


Public liability insuranceBusiness insuranceProfessional indemnity insuranceEmployers’ liability insuranceLandlord insuranceTradesman insuranceSelf-employed insuranceRestaurant insuranceVan insuranceInsurers


About usOur teamAwardsPress releasesPartners & affiliatesOur charitable workModern Slavery ActSection 172 statementSocial mediaSite map

Customer support

Contact & supportPolicy renewalMake a claimProof of policyComplaintsAccessibility


6th Floor99 Gresham StreetLondonEC2V 7NG

Northampton 900900 Pavilion DriveNorthamptonNN4 7RG


Careers at Simply BusinessTech careersCurrent opportunities


BenefitsRefer a friendFinance


Terms & conditionsPrivacy policyCookie policyVuln Disclosure policy


Knowledge centreOpinionsMicrosites

© Copyright 2024 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.