Debitoor Dictionary

Accounting terms explained in a simple way

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Tangible Assets - What are Tangible Assets?

Definition: A tangible Asset is an asset that has a material or physical form - anything that can be touched.

Tangible assets include both fixed assets, such as buildings, vehicles, machinery, etc., along with your current assets, such as your inventory, stock, and cash. The opposite of a tangible asset is an intangible asset.

Tangible assets can be more readily sold to raise cash or they can be used as collateral to raise loans. Since they are tangible items, they also have the risk of being destroyed by fire, hurricane, or other disasters or accidents.

Accounting for tangible assets

Many tangible assets receive special treatment for accounting purposes. For example, if these assets have an anticipated useful life of more than one year, then their worth will need to be depreciated over their useful life.

When preparing the balance sheet, tangible assets will typically be listed under 'Property, plant and equipment.'