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The Behavior of an Asset

 


Recently, I have been thinking a lot about assets. These days, we can find plenty of products marketed as assets. It caught my attention and I could not comprehend the meaning of an asset. Though there is a technical/accounting-based definition of an asset, I am more focused on the behavioral definition of an asset as it influences the common people.

Source: Internet

To market a product, saying it is an asset, even though it isn’t has become a norm. My curiosity led me to read an old document written by the then Chief Accountant of the Securities and Exchange Commission — Walter P. Schuetze. There he wrote extensively about the practices of the Financial Accounting Standards Board in defining assets. This paper was more about the accounting of assets. Companies and their auditors use this technique to map balance sheets. I have explained in earlier blogs about assets and liabilities from the perspective of Robert Kiyosaki.

Read: https://therutvikdiary.blogspot.com/2024/08/Cashflow-the-updated-monopoly.html

I was still very much unsatisfied about what can be classified as an asset for a common person so that he/she can make a wise decision. I talked about it with my Personal Finance professor. He agrees that such a classification framework has to be created for the average person like me. Meanwhile, I also discovered a product extensively sold as an asset, but has no characteristics of one. People are investing in this so-called asset in the hope of gaining benefits, however, their purchases often result in being an asset for someone else, especially in a country like India. Mind you the purchase of this instrument is unavoidable in 99.99% of the cases but labeling it as an asset is what makes me uncomfortable.

This was my opening thought about this topic, this topic isn’t rebellious, but a product of calm thoughts that emerged in quietness…

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