Every business has various types of resources and assets, some of which are clearly visible and others of which are less obvious. Buildings, vehicles, factories, manufacturing equipment and land are tangible resources that have a clear and easily determined market value. Corporate reputation and goodwill are some of the intangible assets that are far more open to subjective assessment.
Resources as a Tangible Asset
Large corporations engaged in primary resource extraction have extensive holdings of very tangible goods. In some cases, the corporation owns the land on which these resources are located, while in other, slightly less tangible, situations, the corporation owns the rights to the resource, for example coal or oil, located on public land. In either case, the resource is a physical reality, the value of which can be determined financially by consulting the going market value of a barrel of oil or a ton of coal.
Machines and Infrastructure
Large companies develop extensive holdings of assets in the form of machines and infrastructure. These tangible assets differ from resources because they are not raw resources that are destined to be sold, but are owned as tools by the company for the purpose of processing and selling other things. Lumber mills, oil refineries, electric plants and vehicle fleets fall into this category. Another aspect of a tangible asset is that its value is not altered if its ownership is transferred. While something like business reputation may change when the company is sold, a dump truck will work as well for one owner as for another.
Knowledge as an Intangible Asset
The collective knowledge of a corporate workforce represents a tremendous resource and asset that is very difficult to quantify in financial terms, and impossible to sell. Knowledge is gained through a combination of education and experience, and grows over time within the structure of a particular industry or corporation. In some cases, particularly in information-based industries such as software, the collective knowledge of a workforce represents the primary asset of the corporation, yet it remains intangible.
Networks and Connections
Closely connected to both the identity of a corporation and to the knowledge of its staff is the network, the connections and the associates who work with the corporation. Knowing who is available to do what, what other companies can provide needed resources and what companies can distribute finished products effectively are essential and very valuable pieces of information. These networks that exist between companies are essential to the smooth functioning of these companies, but their reality is intangible and their financial value is nearly impossible to calculate accurately.
Jagg Xaxx has been writing since 1983. His primary areas of writing include surrealism, Buddhist iconography and environmental issues. Xaxx worked as a cabinetmaker for 12 years, as well as building and renovating several houses. Xaxx holds a Doctor of Philosophy in art history from the University of Manchester in the U.K.