What is Tangible Asset?

A tangible asset is an asset that has a physical form. These are the physical resources a company owns and uses in its operations to generate income. Tangible assets can be either current assets (like inventory) or long-term fixed assets (like land, buildings, and machinery).

For Startups: For a hardware or manufacturing startup, tangible assets like machinery and inventory form a significant part of their balance sheet. For a software startup, tangible assets are usually less significant and might just include items like laptops and office furniture. The value of these assets is recorded on the balance sheet and, for long-term assets, is depreciated over time.

Example: A D2C startup's tangible assets include its stock of products, the equipment in its packaging facility, and the computers used by its team.