What are tangible assets?
Tangible assets are the assets on a company’s balance sheet that have a physical form. This includes machinery, office equipment and property, as well as materials that are used in production.
Current vs long-term tangible assets
Current tangible assets are those that can be turned into cash in the short term. These will appear in an earnings report as revenue. Company inventory is an example of a current asset.
Long-term tangible assets, also called fixed assets, are those that will not be turned into cash within one year. This means their value will depreciate, and so their cost is divided among the years of use. Machinery is an example of a long-term asset.
Different types of tangible assets will be handled differently in accounting, because it can be difficult to exchange them for cash. Fixed assets like property, for example, have less market liquidity and take longer to sell.
