Hi everyone,
Can someone please explain to me the difference between these two? I thought Asset would comprise Property but then I noticed property is split into tangible and intangible properties. I was thinking property was part of tangible assets but now I’m confused.
Thank you in advance!
In: Economics
“Asset” is the highest term in the order. Everything you’re talking about are assets. Although “asset” is quite vaguely and broadly defined, it’s sufficiently precise in 99% of cases.
Assets can be tangible and intangible.
“Property” is a less well-defined term and in professional contexts ALMOST ALWAYS refers to physical property. Sometimes, people use it synonymously with assets, e.g. “That wallet is my property!”
“Intangible property” is more rarely used. I’d think it was used either due to the legal culture in a country just having tended to use it, or in relation to “property” as synonymous for “assets”. The meaning looks to be the same as “intangible assets”.
Property is physical stuff that belongs to you. Houses, electronics, books etc. Some places may refer to this definition of property as “tangible assets” and use the word property to specifically mean land and buildings.
Assets are everything that belongs to you that’s got monetary worth. As well as “tangible assets” this can include stuff that you can’t see or touch but still has value,”intangible assets”.
Intangible assets includes stuff like owning stock in a company, having patents and other intellectual property, contracts that will earn you money and so on.
A tangible asset is something you can see and feel. Property you own is a tangible asset. Intangible assets are something you cannot see. An example of an intangible asset would be where you helped someone and they owe you a favour, this is sometimes referred to as goodwill. Please note the definition of what is tangible or intangible can be different depending on circumstance, but owned property is always tangible.
Houses and Boats are both property; things you can touch. The House is an asset as it is likely to provide future value. The Boat is a liability as it is likely to keep loosing money with value loss over time.
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