Conceptual Framework for Financial Reporting

Definition of an asset
An asset is a present economic resource controlled by the entity as a result of
past events.
An economic resource is a right that has the potential to produce economic
benefits.
This section discusses three aspects of those definitions:
(a)
right (see paragraphs 4.6–4.13);
(b)
potential to produce economic benefits (see paragraphs 4.14–4.18); and
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Conceptual Framework
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(c)
control (see paragraphs 4.19–4.25).
Right
Rights that have the potential to produce economic benefits take many forms,
including:
(a)
rights that correspond to an obligation of another party (see
paragraph 4.39), for example:
(i)
rights to receive cash.
(ii)
rights to receive goods or services.
(iii)
rights to exchange economic resources with another party on
favourable terms. Such rights include, for example, a forward
contract to buy an economic resource on terms that are
currently favourable or an option to buy an economic resource.
(iv)
rights to benefit from an obligation of another party to transfer
an economic resource if a specified uncertain future event
occurs (see paragraph 4.37).
(b)
rights that do not correspond to an obligation of another party, for
example:
(i)
rights over physical objects, such as property, plant and
equipment or inventories. Examples of such rights are a right
to use a physical object or a right to benefit from the residual
value of a leased object.
(ii)
rights to use intellectual property.
Many rights are established by contract, legislation or similar means. For
example, an entity might obtain rights from owning or leasing a physical
object, from owning a debt instrument or an equity instrument, or from
owning a registered patent. However, an entity might also obtain rights in
other ways, for example:
(a)
by acquiring or creating know-how that is not in the public domain
(see paragraph 4.22); or
(b)
through an obligation of another party that arises because that other