Asset Accounting — Overview
What is an asset? An asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow. Examples: cash, equipment, inventory, land.
Recognition (IFRS-style): Recognize an asset when it is probable that future economic benefits will flow to the entity and the cost can be measured reliably.
Initial measurement: Assets are typically recorded at cost (purchase price plus directly attributable costs).
Subsequent measurement: Depreciation (for depreciable assets) must be recognized systematically over the asset’s useful life; impairment reviewed if indications exist.
Common journal patterns: Purchase: Dr Equipment (Asset) / Cr Cash (Asset); Depreciation: Dr Depreciation Expense / Cr Accum. Depreciation (Contra asset).
Use the practice tasks to post typical asset transactions and click Explain Impact to see how postings affect the P&L and Balance Sheet.