AICPA
Terminology Bulletins
"Something represented by a debit
balance that
is or would be properly carried forward upon a closing of books of
account
according to the rules or principles of accounting (provided such debit
balance is not in effect a negative balance applicable to a liability),
on the basis that it represents either a property right or value
acquired,
or an expenditure made which has created a property right or is
properly
applicable to the future. Thus, plant, accounts receivable, inventory,
and a deferred charge are all assets in balance-sheet classification." |
Illinois Study Group (1964)
Assets have three principal
characteristics:
- They are of present or potential
benefit to
the enterprise; i.e., they must possess the quality of usefulness to
the
enterprise.
- They are measurable in monetary
terms
- They are the result of
enterprise transactions
Therefore, "assets are those rights
and resources
of an enterprise arising from enterprise transactions, of present or
future
benefit to the enterprise, and expressible in monetary terms." |
APB
Statement No. 4
Assets--economic resources of an
enterprise
that are recognized and measured in conformity with generally accepted
accounting principles. Assets also include certain deferred charges
that
are not resources but that are recognized and measured in conformity
with
generally accepted accounting principles. |
Concepts
Statement No.
6
(pp.
796-798)
An asset has three essential
characteristics:
- it embodies a probable future
benefit that involves
a capacity, singly or in combination with other assets, to contribute
directly
or indirectly to future net cash inflows
- a particular entity can obtain
the benefit and
control others' access to it;
- the transaction...giving rise to
the entity's
right to or control of the benefit has already occurred.
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IASB and FASB Preliminary Definition of
an Asset
An asset of an entity
is a present economic resource to which the entity has a right or
other access that
others do not have.
- Present
means that on the date of the financial statements both the economic
resource exists and
the entity has the right or other access that others do not have.
- An economic resource
is something that is scarce and capable of producing cash inflows or reducing cash outflows,
directly or indirectly, alone or together with other economic resources. Economic
resources that arise from contracts and other binding arrangements are unconditional
promises and other abilities to require provision of economic resources, including
through risk protection.
- A right or other
access that others do not have enables the entity to use the
economic resource and
its use by others can be precluded or limited. A right or other access
that others do not
have needs to be enforceable by legal or equivalent means.
http://www.fasb.org/news/SDR_10_20-21_08.pdf
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Paton's
Definition as
quoted in ARS #10.
"Assets
are not inherently tangible or physical.
An asset is an economic quantum. It may be attached to or represented
by
some physical object, or it may not. One of the common mistakes we all
tend to make is that of attributing too much significance to the
molecular
conception of property. A brick wall is nothing but mud on edge if its
capacity to render economic service has disappeared; the molecules are
still there and the wall may be as solid as ever, but the value is
gone...
...the distinction
between
tangibles, so-called,
and intangibles, so called, is not a fundamental line of cleavage. In
principle,
the intangible asset is just as admissible to the respectable,
recognized
company of business property as something you can stub your toe on...
It is a convenience
to be able to
associate
asset quanta with specific physical objects, or groups of objects, and
full advantage should be taken of this possibility in business
accounting.
But the view that if such association is impractical the segment of
value
under consideration is invalid or suspect is unwarranted."
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