We are witnessing a tremendous rise in the price of daily commodities, flats, rented apartments, fees for earning knowledge, etc. As a result, it becomes difficult to save up for our future generations. One of the best ways one can invest money is by buying properties like land, precious metals, stocks, gaining ownership of a business, etc. Because with time, their value will increase, thus paving a way to secure our future generations.
In this module, we’ll be discussing tangible properties.
The properties which can be physically touched, including both immovable (real property) as well as personal property (movable property. They can be either long term or short term. Some examples of tangible properties include:
Different types of securities like bonds, cash, stock.
Tangible Properties is mainly of two types:
Includes cash, bonds, stocks, and other marketable securities. These types of tangible properties are always in high demand and are readily used up within a short time span and thus during an emergency, they can be used to raise money.
Includes lands, equipment, machinery, different vehicles, buildings, etc. These are recorded as Property, Plant, and Equipment (PP&E) in a company’s balance sheet.
These types of properties are used over and over again for a very long duration of time.
The information about these assets is recorded in balance sheets where their cost (at the time of acquiring them), useful life, book value, and current market value is recorded. It may sometimes happen that a tangible asset may become obsolete due to damage, and its fair value decreases. The companies calculate the useful life (duration of time for which the company can use an asset) of the tangible assets (machinery and equipment) by depreciation method in which the cost of using the various machinery and equipment are recorded individually.
At the end of the useful life, the companies sell their tangible assets (machinery and equipment) for a salvage value.