What does 'asset' mean in finance?

In finance, an 'asset' refers to a resource that is owned by an individual or a company and has economic value. This definition encompasses both tangible assets, such as real estate and machinery, and intangible assets, like patents or trademarks. Assets are crucial in financial statements, as they represent the value that a person or organization can utilize to generate income or further investment. They can contribute to overall financial stability and growth by being leveraged or liquidated when necessary.

Understanding assets is fundamental in financial literacy, as managing and growing assets is key to building wealth and achieving financial goals.