"The entire property of all kinds possessed by or owing to a person or organisation is called assets". "Assets are valuable resources owned by a business and acquired at a measurable money cost". They may be:

1. Fixed Assets: These are those assets, which are acquired for relatively long periods for carrying on the business of the enterprise. Such assets are not meant for resale. For example, Land and Building, Plant and Machinery etc.
2. Current Assets: These assets are also termed as ‘Floating or Circulating Assets’. Such assets are acquired with the intention of converting them into their values constantly. The essential difference between ‘Current Assets’ and ‘Fixed Assets’ is that the current assets are held essentially for a short period and they are meant for converting into cash. Unsold stock, debtors bills receivables, bank balance, cash in hand, etc are some of the examples of current assets. According to the Institute of Chartered Public Accountants, U.S.A., "Current Assets include cash and other assets or resources commonly identified as those which are reasonably expected to be realised in cash or sold or consumed during the normal operating cycle of the business.
3. Fictitious Assets: Assets of no real value but included in the balance sheet for legal or technical reasons, e.g., preliminary expenses.
4. Tangible and Intangible Assets: Tangible assets are those assets, which can be seen and touched i.e. assets having their physical existence e.g. land and building, plant and machinery, furniture and fixtures, stock-in-trade, cash, etc. Intangible assets cannot be normally sold in the open market since they are not having any physical existence e.g. goodwill, patents, trade marks, prepaid expenses etc.
5. Liquid Assets: Assets that can be easily converted into cash like Bank account, Bills receivables, etc. As a matter of fact, all current assets excluding stock-in-hand and prepaid expenses are called liquid assets.
6. Wasting Assets: These are the assets which are exhausted with, or which lose themselves in, the goods they produce. Mines and quarries are common examples of such assets. Copyright, patents, trademarks, etc. are also classified as wasting assets since they get exhausted with the lapse of time.

These are those assets, which are acquired for relatively long periods for carrying on the business of the enterprise. Such assets are not meant for resale. For example, Land and Building, Plant and Machinery, etc. Current assets provide benefits to the organization by their exchange into cash. In the case of fixed assets, value addition arises by facilitating the process of production or trade.

All man made things have limited life. In accounting, we are concerned with the useful life of the assets. Useful life is the period for which a fixed asset could be economically used. Benefits from the fixed assets will flow to the organization throughout its useful life.

Valuation of the fixed assets is usually made on the basis of original cost. However, since the assets have the limited life the cost will be expiring with the expiration of the life. Thus, valuation of the asset is reduced proportionate to the expired life of the asset. Such expired cost is known as depreciation.

Example: Suppose a trader buys a delivery van at a cost of Rs. 50,000. Assume that the van will have to be discarded as junk at the end of five years. In this case we take a depreciation of Rs. 10,000 per year and the process of providing depreciation for each year will continue. At the end of the fifth year the valuation of the asset will be zero. The value of the assets at cost is usually referred to as gross fixed assets and the amount of depreciation to date as accumulated depreciation. Net value of the asset is usually referred to as net fixed assets.

Fixed assets normally include assets such as land, building, plant, machinery, etc. All these items, with exception of land, are depreciated. Land is not subject to depreciate and hence shown separately from other fixed assets.