Real Asset What is it?

In the field of business management, real assets are used to hedge negotiations or minimize investment risk, since they have a low correlation with financial assets.

At a global level, there are indices that allow us to observe the evolution of the prices of these assets, since these can be future negotiations.

The market for these assets determines the flow of goods called national income that will determine real wealth and the demand for financial assets.

What is a real asset?

It's that one active that corresponds to tangible and intangible physical goods, object of use or consumption, which have a value for themselves, compared to financial assets whose value is for what represent.

This term is used in the accounting, auditing and financial Accounting. Where it is known as any good or material object that is the possession of a natural or legal person (company), such as buildings, machinery, tools, equipment, furniture, vehicles, all raw materials, products in process, stocks in inventory, among others.

It is sometimes known as a Physical Asset.

Real asset types

Real assets can be real estate, land, infrastructure investments, and intangible assets, here is a brief detail of each:

Real estate:

All real estate investment, includes real estate, commercial premises, plots of land, etc., constitutes one of the main assets in the hands of individual investors, especially in Spain. Another asset of this type is stocks and bonds.

Land:

It encompasses the land and trees used in the creation of forest products.

Infrastructure:

Includes tolls on highways controlled by the state, utility companies, ports, airports, and others.

These investments in infrastructure generate collection rights assets, opposite to the forged cash flows for these assets, through securities for the privatization operation or for new private projects of infrastructure.

Intangible assets:

It covers assets such as copyrights, intellectual property, patents and trademarks, etc.

Difference Between Tangible and Intangible Assets

Tangible type assets can include financial assets and real assets, a simple asset classification tangible includes stocks, property, bonds, cash, machinery, technological equipment, vehicles and others.

Intangible assets, on the other hand, include elements of the intangible category, where they classify only a very small portion of goods, such as patents and trademarks.

Advantages and Disadvantages of Real Assets

Events like inflation, fluctuations in currency exchange rates and many other macroeconomic factors can affect both the private sector and the public, in this sense it has been found that real assets can be more stable in the face of these events mentioned than assets financial

As a disadvantage, the fact that real assets may have less liquidity at inopportune times, than financial assets, since they involve a longer time to be sold and also have higher transaction rates. Mention should also be made of the fact that real assets they carry higher storage and transportation costs than many financial assets.

To conclude, it is important to highlight that a real asset can be used in the generation of multiple resources that can cause changes in the finances or financial situation of the company that owns them.

A real asset has the ability to increase the wealth of a company or a country by being accounted for within the GDPAs for the company, it is safer to have real assets, only that they must handle the unforeseen very carefully, because These assets also represent less liquidity, a real asset can be said to be long-term assets with a value implicit.