In financial terms, what do 'assets' represent?

Assets represent resources that are owned by an individual or firm and have economic value. They can take various forms, including cash, real estate, inventory, stocks, and machinery. The ownership of these resources provides potential for future economic benefit, whether through their use in operations, the generation of cash flow, or appreciation over time.

In contrast, debts owed to others represent liabilities, which are obligations rather than resources owned. Cash flows from operations pertain to the income generated from a company’s regular business activities, while investment returns over time refer to the gains or losses made from investments, but neither describes the concept of assets themselves. Therefore, identifying assets as resources owned underscores their role in financial statements and overall wealth.