Asset

From ForcaWiki, the simple encyclopedia

Think about everything in your room that is actually worth something: your bike, your video game console, maybe some cash saved in a jar. Now think of something a little different: a library card. You cannot hold a library card up and sell it for cash the way you could your bike, but it still has real value, since it lets you borrow books for free. Both kinds of things, the ones you can touch and the ones you cannot, count as valuable things you own.

A business, like a film production company, keeps track of exactly this kind of list, and calls it its assets. An asset is anything tangible, meaning something you can physically touch and count, or intangible, meaning something real and valuable but without a physical form, that has value to a business. Cash in the bank is an asset. Cameras and trucks used to film a movie are assets. So is a movie's ownership of its own story and characters, the kind of thing tracked in its Chain of Title, even though you cannot hold that ownership in your hand the way you can hold a camera.

Why keeping track matters

Businesses list their assets so that banks, investors, and the company itself can see clearly what it truly has. This matters a lot in the movie business, since a production company's most valuable asset might not be a building or a truck at all. It might be the rights to a beloved story or a set of characters, an intangible asset that can be worth far more than anything you could actually touch.

Fun facts

• A film studio's most valuable assets are often intangible ones, like the rights to a famous character, which can be worth vastly more than every camera and truck the studio owns combined.
• Assets are not just nice to have. They can also be offered up as Collateral, something a lender is allowed to take if a loan does not get paid back.
• Owning stock, like Common Stock, in a company is really just owning a small slice of everything that company's assets add up to.