Tangible Assets

Tangible Assets

Tangible assets are physical assets that can be touched and seen. They include:

• Land: Plots of land, buildings, and other real estate.
• Structures: Buildings, bridges, roads, and other infrastructure.
• Machinery: Equipment, tools, vehicles, and other machinery.
• Inventory: Goods and materials that are held for resale or production.
• Investments: Assets such as stocks, bonds, and derivatives that are traded on financial markets.

Examples of Tangible Assets:

• A house
• A car
• A computer
• A painting
• A piece of land

Characteristics of Tangible Assets:

• Physical: Can be touched and seen.
• Measurable: Can be quantified in terms of units such as dollars, square meters, or tons.
• Usable: Can be used to produce or consume goods and services.
• Durable: Can withstand use and last for many years.
• Transferable: Can be transferred ownership to others.

Benefits of Tangible Assets:

• Collateral: Can be used as collateral for loans.
• Wealth accumulation: Can help build wealth and provide a source of retirement income.
• Protection of savings: Can protect savings from inflation and market fluctuations.
• Usefulness: Can be used for both personal and business purposes.

Drawbacks of Tangible Assets:

• Depreciation: Can depreciate in value over time.
• Maintenance: Require maintenance and repair to function properly.
• Risk of loss: Can be damaged or destroyed in various ways.
• High cost: Can be expensive to purchase and maintain.