I was asked, awhile ago, whether a house is an asset or a liability. This might seem like an odd question. Of course your home is an asset, right? Well, that all depends on who you ask and what your definition of an asset or liability is.
We often hear phrases like, “A house is typically your most expensive asset in life.” Of course, these people mean that out of everything you buy in your life, your house is more than likely the most expensive. So, sure, a home (or condo) is an expense. Your mortgage is an expense. But an expense can be an asset, as we discussed in the related post: Is Your Car an Asset or a Liability?
If you had to make a guess, what would you say the definition of an asset is in the business world? Well, let’s step back for a minute. What is the number one goal of any business? It’s to make money. If they didn’t make money, then there would be no business, which makes it pretty apparent that it’s the top goal out of everything else.
If you walked up to your neighbor and asked them if their house is an asset or not, they would look at you funny and say, “Of course it’s an asset –.” It’s true. If you had the option to rent an apartment or buy a house, it is probably wiser to buy the house. Sure, you’ll have to make improvements once in a while, but typically your house will gain value through the years and may even earn you more than the rate of inflation. This is why for most people a house is most definitely considered an asset.
Why are those machines considered to be an asset to the business? Well, they are an asset because they are directly helping the company make money, which is their number one goal. Without them, the company would be sunk. So, let’s step back in again. What is the definition of an asset in the business world? It’s any tangible object within the company that has value and that helps the company make money.
Related Posts :
Luxury Homes - Increased value of property
Home improvement that will value your property
De personalize your home before putting in market
Splurges that will value your home
Tags : House improvement tips, house renovation, Cosmic Projects,Cosmic Structures.
0 comments:
Post a Comment
Note: only a member of this blog may post a comment.