Listen to a Business English Dialogue About Tangible asset
Kennedy: Steven, what exactly is a tangible asset in business?
Steven: Well, Kennedy, a tangible asset is something physical that a company owns and can touch or see, like machinery, buildings, or vehicles.
Kennedy: Ah, I get it. So, how do tangible assets differ from intangible ones?
Steven: Intangible assets, Kennedy, are things like patents, trademarks, or goodwill, which aren’t physical but still have value. Tangible assets, on the other hand, are concrete and can be readily quantified.
Kennedy: That makes sense. Why are tangible assets important for businesses?
Steven: Tangible assets are crucial, Kennedy, because they often represent a significant portion of a company’s value and can be used as collateral for loans or sold to generate cash in times of need.
Kennedy: I see. How do businesses typically account for tangible assets?
Steven: Businesses usually record tangible assets on their balance sheets at their historical cost, Kennedy, and then depreciate them over time to reflect their diminishing value as they’re used or as they age.
Kennedy: That sounds logical. Are there any challenges associated with managing tangible assets?
Steven: Well, Kennedy, one challenge is ensuring that tangible assets are properly maintained to preserve their value and functionality, and businesses also need to keep track of changes in market conditions or technology that might affect the value of these assets.
Kennedy: Thanks for explaining, Steven. It’s clear that tangible assets play a vital role in the financial health and operations of businesses.
Steven: Absolutely, Kennedy. They’re tangible evidence of a company’s value and capabilities.