Operating assets are tools and resources that your business owns and that you use to produce goods or deliver services.
Assets are valuable resources that your business owns. What categorizes operating assets are that they’re essentials that you use to produce and sell goods or to deliver services.
It can be anything from office necessities like stationary and laptops, to manufacturing machinery or a company car that you use to travel to work locations.
Types of operating assets
Current assets can be sorted into the categories current assets and fixed assets.
Current assets are assets that you intend to use or sell shortly, such as inventory or cash. Inventory is also a type of operating asset, since it represents the goods that you sell.
Fixed assets, which are assets that you intend to own or use for a long time, such as buildings, cars, and machinery. If you use this building as a shop space, then it is an operating asset, since it is where you sell your goods. If you have a machine that you use to produce goods, this is also an operating asset. And so on.
Pro-tip: Remember to depreciate your fixed assets
Assets are typically classified as ‘fixed’ if you’re going to have them for a long time—for example three years—and they’re worth more than a certain amount. In that case, you have to depreciate them. This is because the asset’s value decreases over time, and the accounts should be updated to reflect this.
Other types of assets
Operating assets, fixed assets, and current assets are just some categories of assets. Other categories include:
- Liquid assets, which are assets like cash, or assets that can be instantly converted to cash, for example bank deposits
- Intangible assets, which are valuables that are non-physical, such as branding, reputation, and goodwill
It can be a bit difficult to pin down your assets. A liquid asset is also a current asset, but not all current assets are liquid assets. One example is inventory, which can be converted to cash in the short-term, but you probably can’t sell it off as quickly as you can convert actual liquid assets to cash.
If you have questions about assets or about accounting, you should speak to an accountant.