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Earning Assets

What is 'Earning Assets'

Earning assets are income-producing investments that are owned, or held, by a business, institution or individual. These assets also have a base value, but have the ability to produce additional funds, beyond this inherent value, for the investment holder. This allows the investment holder to maintain the assets as a source of earnings, or sell the assets for a lump sum based on the inherent value.

Explaining 'Earning Assets'

Earning assets include stocks, bonds, income from rental property, certificates of deposit (CDs) and other interest or dividend earning accounts or instruments. They can provide a steady income, making them especially attuned to long-term goals such as retirement planning. Earning assets are a reflection of only part of the total assets of an individual or institution.

Maintenance on Earning Assets

Some earning assets, such as certificates of deposit, require no additional effort once the initial investment is made. Income is produced through interest or dividend payments and are a part of the essential design of the particular investment type. These investments require little to no maintenance, and generally do not require any additional investment on the part of the investment holder.

Earning Assets and Tax Obligation

Income from earning assets must be reported on the appropriate tax filings. In the case of income generated by various securities, the investing institutions send yearly statements for tax reporting purposes that include the total amount of interest and/or dividends earned. Income from rental properties must also be declared.


Further Reading


Financial liberalization and bank efficiency: a comparative analysis of India and Pakistan
www.tandfonline.com [PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …

Misspecification of capital asset pricing: Empirical anomalies based on earnings' yields and market valuesMisspecification of capital asset pricing: Empirical anomalies based on earnings' yields and market values
www.sciencedirect.com [PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …

The technical inefficiency effects of Turkish banks after financial liberalizationThe technical inefficiency effects of Turkish banks after financial liberalization
onlinelibrary.wiley.com [PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …

Financial determinants of bank takeovers: noteFinancial determinants of bank takeovers: note
www.jstor.org [PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …

Inputs, outputs, and a theory of production and cost at depository financial institutionsInputs, outputs, and a theory of production and cost at depository financial institutions
onlinelibrary.wiley.com [PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …

Financial structure and bank profitabilityFinancial structure and bank profitability
openknowledge.worldbank.org [PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …

Asset Impairments and Earnings Management <span style=[J]' src='/thumbnails/?img=http%3A%2F%2Fen.cnki.com.cn%2FArticle_en%2FCJFDTotal-KJYJ200603003.htm' />Asset Impairments and Earnings Management [J]
en.cnki.com.cn [[J]' href='https:/api.miniature.io/pdf?url=en.cnki.com.cn%2FArticle_en%2FCJFDTotal-KJYJ200603003.htm'>PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …

The changing time-series properties of earnings, cash flows and accruals: Has financial reporting become more conservative?The changing time-series properties of earnings, cash flows and accruals: Has financial reporting become more conservative?
www.sciencedirect.com [PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …

Family financial risk taking when the wife earns moreFamily financial risk taking when the wife earns more
link.springer.com [PDF]
… that the efficiency of commercial banks is much higher in Model A, which uses earning assets as outputs … be due to the presence of high non-performing loans in the asset portfolios of … by Canan Yildirim and the participants of the 4th Annual International Economics and Finance …



Q&A About Earning Assets


Are there any other ways to earn income besides through interest payments?

Yes, some types of securities allow investors to sell their holdings at market prices above their original purchase price if they choose not to hold onto them until maturity dates. In these cases, investors can receive capital gains in addition to interest payments over time depending on how long they hold onto their securities before selling them off.""

What is tangible property?

Tangible property contains various subclasses, including current assets and fixed assets.

What are earning assets?

Earning assets are income-producing investments that are owned, or held, by a business, institution or individual. These assets also have a base value but have the ability to produce additional funds beyond this inherent value for the investment holder. This allows the investment holder to maintain the asset as a source of earnings or sell it for a lump sum based on its inherent value.

What are the two major classes of assets?

Tangible and intangible assets.

How do you report income from earning assets?

Income from earning assets must be reported on appropriate tax filings such as those related to securities and rental properties. The investing institutions send yearly statements for tax reporting purposes that include total amount of interest and/or dividends earned.

What is an example of an earning asset?

Some examples include certificates of deposit and stocks.

What is a fixed asset?

Fixed assets are long-term resources, such as land, buildings, equipment, and machinery that will not be converted into cash within the next year.

What is a current asset?

A current asset is any resource that could be converted to cash in one year or less.

What are assets?

Assets are anything owned or controlled by a business or an economic entity. They can be used to produce positive economic value.