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capital asset

A capital asset, in economics, is any asset that serves as a factor of production? of some product or service that is itself contributing to human well-being. A factory, fishing boat, log skidder, taxicab, farmland or irrigation system would all be considered a capital asset in any existing accounting system, while a cigarette or other consumable would not be. However, some assets do damage in their ordinary use, and this makes them difficult to distinguish from weapons or waste:

There are issues in whether weapons can be considered capital assets as they are not a means of production? but reputed to be a means of protection? of control of that asset. There are also issues in intangibles - non-physical assets that are not formally recognized as financial capital, usually those associated with human capital. A breakdown of types:

See Toronto's real capital and Beyond GAAP for more on this.

To refer to something as a capital asset its to imply it is useful in creating wealth? - which may be defined in terms of well-being or which could be interpreted strictly in monetary terms, e.g. financial capital as debt has a financial yield? but this is not to imply that the money itself is producing well-being - accordingly there are issues with debt and the right to receive a yield based on investments - see debt economy?.

Other issues in capital asset definition and management:



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