QandAs: Legal

What is a Tangible Asset?

Answer:
A tangible asset actually exists and can be

assigned a value, such as an office building, factory machinery, office equipment, a vehicle or even hard cash. Tangible assets can also be in the form of titles or deeds, or possibly a guaranteed payment for a pre-sold product. The important thing is that a tangible asset can be proven to be part of a company's overall net worth.

A tangible asset such as a piece of machinery or a company vehicle may have one assessed value at the time of purchase and a depreciated value over its lifetime. An office printer purchased for $2,000 in 2001, for instance, would be considered a $2,000 tangible asset once it is installed on the office floor. By 2006, the same printer would still be considered a tangible asset, but the value of a five year old machine might be closer to $750 for taxation purposes. Some tangible assets do not depreciate in value, however, such as cash reserves. Tangible assets may be liquidated in order to satisfy intangible debts and other financial obligations, or may be included as part of a company sale.