What Are Tangible Assets?

In business parlance, an asset can be anything owned by the firm that would bring future economic benefits which can be measured in economic terms. Assets are classified into tangible assets and intangible assets.

Tangible assets can be defined as those assets that have a physical form such as buildings, machinery and land. Tangible assets would also include cash, accounts receivable, property, inventory, plant and equipment of the firm. Tangible assets are accounted after deducting depreciation. Tangible assets are those whose value is dependent on particular physical characteristics. Tangible assets are also known as real assets.

Tangible assets are different from intangible assets which would include copyright, trademarks and goodwill of a firm. It is also different from natural resources such as timberland, coal deposits and oil reserves.

Assets classified as tangible assets and intangible assets are recorded separately in a balance sheet. Tangible assets depreciate over the lifespan whereas intangible assets are amortized.