A Tulsa CPA explains characteristics of an asset on a balance sheet:
On an accounting statement, an asset has three essential characteristics - it embodies a probable future benefit that involves a capacity, singly or in combination with other assets, to contribute directly or indirectly to future net cash inflows. Also, a particular entity can obtain the benefits and controls other assets to it. Finally, the transaction or other event giving rise to the entity's right to or control of the benefit has already occurred. Assets commonly have other features that help identify them - for example, assets may be acquired at a cost and they may be tangible, exchangeable or legally enforceable. However, those features are not essential characteristics of assets. That is, assets may be acquired without cost, they may be intangible, and although not exchangeable they may be usable by the entity in producing or distributing other goods or services.
Similarly, although the ability of an entity to obtain benefit from an asset and to control others' access to it generally rests on a foundation of legal rights, legal enforceability of a claim to the benefit is not a prerequisite for a benefit to qualify as an asset if the entity has the ability to obtain and control the benefit in other ways.
According to our Tulsa, OK CPA firms, the kind of items that qualify as are also known as economic resources. They are the scarce means that are useful for carrying out economic activities, such as consumption, production and exchange.
