Active Asset

Posted in Finance, Accounting and Economics Terms, Total Reads: 574
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Definition: Active Asset

An active asset is the class of assets which is required for operating a business on daily basis.


Active assets help business to function on a daily basis. Apart from this there are passive assets which are not as important as active asset class. Business will not stop operating if requirements of passive assets are not met at a point of time. Active assets are not same as active asset allocation. Active asset allocation is a part of under investment strategy of a company.


These assets can be tangible (e.g. machines for operational activites, buildings etc.) or intangible (for example Copyrights, patents etc.). Active assets are noted down on the asset side of the balance sheet.

 

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