ASSET

asset. 1. An item that is owned and has value. 2. (pl.) The entries on a balance sheet showing
the items of property owned, including cash, inventory, equipment, real estate, accounts receivable,
and goodwill. 3. (pl.) All the property of a person (esp. a bankrupt or deceased person) available
for paying debts or for distribution.

intangible asset. Any nonphysical asset or resource that can be amortized or

converted to cash, such as patents, goodwill, and computer programs, or a
right to something, such as services paid for in advance.
legal asset. A decedent's asset that by law is subject to the claims of creditors or legacies.
Also termed probate asset. [Cases: Executors and Administrators 38. C.J.S. Executors and
Administrators 2, 121, 130.]
new asset.Wills & estates. In the administration of a decedent's estate, property that the
administrator or executor receives after the time has expired to file claims against the estate.
nominal asset.An asset whose value is difficult to assess, such as a judgment or claim.
nonadmitted asset.An asset that by law may not be included in evaluating the financial
condition of an insurance company because it cannot be converted quickly into cash without a
financial loss. Cf. admitted asset. [Cases: Insurance 1363. C.J.S. Insurance 168.]

nonprobate asset. Property that passes to a named beneficiary upon the owner's death
according to the terms of some contract or arrangement other than a will. Such an asset is not a
part of the probate estate and is not ordinarily subject to the probate court's jurisdiction (and fees),
though it is part of the taxable estate. Examples include life-insurance contracts, joint property
arrangements with right of survivorship, pay-on-death bank accounts, and inter vivos trusts.
Also termed nonprobate property. Cf. WILL SUBSTITUTE.
personal asset.An asset in the form of money or chattels.
premarital asset.Property that a spouse owned before marrying. In most jurisdictions, this is
part of the spouse's separate property. See SEPARATE PROPERTY. Cf. COMMUNITY
PROPERTY.
probate asset.See legal asset.
quick asset. 1. Cash and other current assets other than inventory. 2. See current asset.
real asset. 1. An asset in the form of land. 2. Loosely, any tangible asset. Also termed hard
asset.
tangible asset. An asset that has a physical existence and is capable of being assigned a value.
wasting asset. An asset exhausted through use or the loss of value, such as an oil well or a
coal deposit.
ASSET ACQUISITION
asset acquisition. Acquisition of a corporation by purchasing all its assets directly from the
corporation itself, rather than by purchasing shares from its shareholders. Also termed asset
purchase. Cf. SHARE ACQUISI-TION.

ASSET ALLOCATION
asset allocation.The spreading of funds between different types of investments with the
intention of decreasing risk and increasing return.
ASSET-BACKED SECURITY
asset-backed security. See SECURITY.
ASSET-BASED FINANCING
asset-based financing. See FINANCING.
ASSET-COVERAGE TEST
asset-coverage test. Accounting. A bond-indenture restriction that permits additional
borrowing only if the ratio of assets (typically net tangible assets) to debt (typically long-term debt)
does not fall below a specified minimum.
ASSET-DEPRECIATION RANGE
asset-depreciation range. Tax. The IRS's range of depreciation lifetimes allowed for assets
placed in service between 1970 and 1980 and for assets depreciated under the Modified
Accelerated Cost Recovery System under the Tax Reform Act of 1986. Abbr. ADR. See
ACCELERATED COST RECOVERY SYSTEM. [Cases: Internal Revenue 3476. C.J.S. Internal
Revenue 230, 234, 239, 249.]
ASSET DIVIDEND
asset dividend.See DIVIDEND.
ASSET-PROTECTION TRUST
asset-protection trust.See self-settled trust under
TRUST.
ASSET PURCHASE
asset purchase.See ASSET ACQUISITION.
ASSETS BY DESCENT
assets by descent.See ASSET.
ASSETSENTRE MAIN
assets entre main.See assets in hand under ASSET.

ASSETS IN HAND
assets in hand.See ASSET.
ASSETS PER DESCENT
assets per descent.See assets by descent under
ASSET.
ASSET UNDER MANAGEMENT
asset under management.See ASSET.
ASSET VALUE
asset value.See NET ASSET VALUE