---
title: "Assets"
description: "What assets are in accounting: the IFRS definition, current vs non-current assets, how they are recorded with debits, and a worked balance sheet example."
canonical: https://ledgeriano.com/glossary/assets
language: en
publisher: "Ledgeriano"
updated: 2026-11-06
---

# Assets

> What assets are in accounting: the IFRS definition, current vs non-current assets, how they are recorded with debits, and a worked balance sheet example.

Assets are resources a business controls because of past events and that are expected to bring future economic benefits, such as cash, receivables, inventory, equipment and software. They carry a debit balance, are listed first on the balance sheet and always equal liabilities plus equity.

Assets are split by how quickly they turn into cash. **Current assets** (cash, receivables, inventory, prepayments) are expected to be realised within twelve months or the operating cycle. **Non-current assets** (property, plant and equipment, intangible assets, long-term investments) serve the business for longer and are usually depreciated or amortised.

Control matters more than legal ownership: a machine held under a lease can be a right-of-use asset, while a customer's goods stored in your warehouse are not your asset. Every asset account in a [chart of accounts](https://ledgeriano.com/glossary/chart-of-accounts) increases with a debit, and contra accounts such as [accumulated depreciation](https://ledgeriano.com/glossary/accumulated-depreciation) reduce the gross amount. See how assets are presented in the [financial statements guide](https://ledgeriano.com/guides/financial-statements).

```
Assets = Liabilities + Equity
Net assets = Total assets - Total liabilities
```

## Example: assets on a small company's balance sheet

A design studio closes the year with the balances below. Total assets of 118,000 are funded by 43,000 of liabilities and 75,000 of equity, so the accounting equation holds.

| Asset | Type | Amount |
| --- | --- | --- |
| Cash at bank | Current | 26,000 |
| Trade receivables | Current | 18,000 |
| Prepaid insurance | Current | 4,000 |
| Computers and equipment (net) | Non-current | 40,000 |
| Software licences (net) | Non-current | 30,000 |
| Total assets |  | 118,000 |

### Is cash an asset?

Yes. Cash on hand and bank balances are the most liquid current assets and are usually listed first.

### What is the difference between current and non-current assets?

Current assets are expected to be turned into cash or used up within twelve months or one operating cycle; non-current assets are held for longer, such as buildings, machinery and long-term investments.

### Why do assets have a debit balance?

By the convention of double-entry bookkeeping, the left side (debit) records increases in assets, which keeps assets equal to liabilities plus equity on the right side.

Guide: https://ledgeriano.com/guides/financial-statements