What are the characteristics of assets?

The characteristics of assets can be summarized as follows:

(1) assets are present rights caused by past events. In other words, the principle of "what happened in the past" plays an important role in the definition of assets. This is also a remarkable feature of traditional accounting. Although some existing phenomena, especially the appearance of derivative financial instruments, have challenged the principle of "what happened in the past", this principle has been generally accepted in practice.

② Assets must be owned or controlled by a specific entity. This is because accounting does not measure all resources, but only the resources under the control of an accounting entity. Therefore, the assets measured in accounting should or must belong to a specific subject, that is, they are exclusive. Here, ownership refers to the ownership of an asset by an enterprise, and control refers to the fact that the enterprise has mastered the future benefits and risks of an asset in essence, but does not own the ownership of the asset at present. The former generally refers to all kinds of property, creditor's rights and other rights of enterprises, while the latter refers to all kinds of economic resources that enterprises only have the right to use but have no ownership, such as fixed assets leased by enterprises through financing.

(3) Assets can bring future economic benefits to enterprises, that is, assets alone or combined with other elements of enterprises can directly or indirectly generate net cash inflows in the future. This is the essence of assets. According to this feature, whether a project constitutes an asset must be judged by whether it has potential future economic benefits. Only those projects with potential future economic benefits can be recognized as assets.

In addition, as an economic resource, the economic benefits related to the asset must likely flow into the enterprise, and the cost or value of the resource can be measured reliably.

(4) Assets must be measurable in money.

This feature shows that the assets listed in the accounting statements are not all the resources of the enterprise, and the resources that can be measured in money are listed in the accounting statements. However, some resources whose value cannot be reliably measured by money, such as the goodwill created by enterprises, have not been recognized as assets in the current accounting practice.