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Hard Asset

Definition

In finance, a "hard asset" may be real estate, commodities, or energy. For example, gold and silver are regarded as "hard" assets. Other types of raw materials, such as oil, copper, and aluminium. are also considered "hard" assets.

What is 'Hard Asset'

A tangible and physical item or object of worth that is owned by an individual or a corporation. In currency transactions, hard assets are synonymous with currencies that the public generally has faith in, such as the U.S. dollar or the euro.

A hard asset is the opposite of an intangible item such as goodwill or a patent.

Explaining 'Hard Asset'

Hard assets often refer to items such as buildings, cash or other fungible assets. Hard assets are considered particularly valuable because they can be used to produce or purchase other goods or services.

When analysts calculate a company's intrinsic value, a portion of this underlying value is derived from the value of its hard assets.

Hard Asset FAQ

What are tangible assets in accounting?

Tangible assets are the physical assets or property owned by a company, such as equipment, buildings, and inventory. Intangible assets are non-physical assets with a monetary value since they represent potential revenue. Intangible assets include patents, copyrights, and a company's brand.

What are the types of assets?

Based on their physical existence, assets are classified as either tangible assets or intangible assets. Tangible assets are assets with physical existence (we can touch, feel, and see them). Intangible assets are assets that lack physical existence.

What are soft assets?

Soft assets are those generally differentiated from hard assets such as plant and machinery, vehicles and commercial property, but have little or no resale value. Soft assets can sometimes include intangible assets as well. This may be a brand, a specific team member's knowledge, or cloud storage.

Is cash a real asset or financial asset?

Financial assets include stocks, bonds, and cash. Real assets include real estate, infrastructure, and commodities.

What are examples of tangible assets?

Examples of tangible assets include cash, inventory, vehicles, equipment, buildings and investments. Intangible assets do not exist in physical form and examples are accounts receivable, pre-paid expenses, and patents and goodwill.

What is considered a liquid asset?

A liquid asset is an asset that can quickly and simply be converted into cash while retaining its market value. Some examples of liquid assets are: Cash. Checking or savings accounts. Certain types of investments.

Are loans tangible assets?

Physical tangible assets have true physical substance, such as furniture, fixtures, equipment, and premises. Financial tangible assets involve a clear legal claim on future income or underlying assets, such as loans and investments.

Further Reading


Financial contractability and asset hardness
papers.ssrn.com [PDF]
… work in financial economics. More broadly, the paper provides microeconomic evidence of the large effect institutions … is higher. If higher protection is associated with increased protection of hard versus soft assets (a hard-asset bias), then …

Hard assets: The returns on rare diamonds and gemsHard assets: The returns on rare diamonds and gems
www.sciencedirect.com [PDF]
… work in financial economics. More broadly, the paper provides microeconomic evidence of the large effect institutions … is higher. If higher protection is associated with increased protection of hard versus soft assets (a hard-asset bias), then …

Financial systems, industrial structure, and growthFinancial systems, industrial structure, and growth
academic.oup.com [PDF]
… work in financial economics. More broadly, the paper provides microeconomic evidence of the large effect institutions … is higher. If higher protection is associated with increased protection of hard versus soft assets (a hard-asset bias), then …

An empirical comparison of published replication research in accounting, economics, finance, management, and marketingAn empirical comparison of published replication research in accounting, economics, finance, management, and marketing
www.sciencedirect.com [PDF]
… work in financial economics. More broadly, the paper provides microeconomic evidence of the large effect institutions … is higher. If higher protection is associated with increased protection of hard versus soft assets (a hard-asset bias), then …

Financial pressure and the behaviour of public enterprises under soft and hard budget constraints: evidence from Italian panel dataFinancial pressure and the behaviour of public enterprises under soft and hard budget constraints: evidence from Italian panel data
www.sciencedirect.com [PDF]
… work in financial economics. More broadly, the paper provides microeconomic evidence of the large effect institutions … is higher. If higher protection is associated with increased protection of hard versus soft assets (a hard-asset bias), then …

Information: Hard and softInformation: Hard and soft
academic.oup.com [PDF]
… work in financial economics. More broadly, the paper provides microeconomic evidence of the large effect institutions … is higher. If higher protection is associated with increased protection of hard versus soft assets (a hard-asset bias), then …

Debt and seniority: An analysis of the role of hard claims in constraining managementDebt and seniority: An analysis of the role of hard claims in constraining management
www.nber.org [PDF]
… work in financial economics. More broadly, the paper provides microeconomic evidence of the large effect institutions … is higher. If higher protection is associated with increased protection of hard versus soft assets (a hard-asset bias), then …

Graduate employability,'soft skills' versus 'hard'business knowledge: A European studyGraduate employability,'soft skills' versus 'hard'business knowledge: A European study
www.tandfonline.com [PDF]
… work in financial economics. More broadly, the paper provides microeconomic evidence of the large effect institutions … is higher. If higher protection is associated with increased protection of hard versus soft assets (a hard-asset bias), then …



Q&A About Hard Asset


What does the term "hard asset" mean in currency transactions?

Hard asset means currencies that the public generally has faith in, such as the U.S. dollar or euro.

How do analysts calculate intrinsic value when calculating a company's value?

A portion of this underlying value is derived from the value of its hard assets.

Are hard assets considered to be intangible items?

No, they are not considered intangible items because they can be used to produce or purchase other goods and services.

What is a hard asset?

A tangible and physical item or object of worth that is owned by an individual or a corporation.

What are some examples of hard assets?

Some examples of hard assets include cash, buildings, and other fungible assets.