asset & resource

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hossein31

Senior Member
Persian
What is the difference between "asset" and "resource"? How do you paraphrase this two sentences?

Your greatest asset is your earning ability. Your greatest resource is your time
 
  • Ecossaise

    Senior Member
    English
    What is the difference between "asset" and "resource"? How do you paraphrase this two sentences?

    Your greatest asset is your earning ability. Your greatest resource is your time
    Asset= Something that is useful/valuable

    Resource(s) = a source of aid or support that may be drawn upon when needed
     

    Thomas Tompion

    Senior Member
    English - England
    What is the difference between "asset" and "resource"? How do you paraphrase this two sentences?

    Your greatest asset is your earning ability. Your greatest resource is your time
    Economists draw a distinction betwen stocks and flows: stocks are not measured by a unit divided by time, they are like the water in a lake (ever so many gallons), and the measure for flows is divided by a unit of time, like the water in a river (ever so many gallons/minute). Money is a stock - you have two pounds in your purse; income is a flow - you are paid x pounds/day. The distinction is of great importance and at the heart of much misunderstanding. Assets are stocks - they can be stocks of capital, like buildings or machines, or they can be knowledge or ability; resources are usually flows - man/hours, flows of inputs (like sheet steel or sulphuric acid/year).

    Having said all that I'm not sure that the speaker or writer in your case is using the words strictly, but they will be in the back of the minds of trained people hearing those words.
     

    cuchuflete

    Senior Member
    EEUU-inglés
    From an accounting point of view, assets are also resources. They are among the things of value a business or person may draw on. They typically have cash value, and can depreciate or appreciate in value over time.
    I believe that liliput pointed out something crucial: you own an asset.

    You may have access to other resources you do not hold title to, and which may not be easily convertible to cash, such as contacts with other people, market awareness, good health, goodwill (in an accounting sense of the word), etc. You may draw on resources whether you own them or not.
     

    panjandrum

    Lapsed Moderator
    English-Ireland (top end)
    Back to a less-specialist perspective, this has been my simple view despite many years of accountants trying to persuade me otherwise.
    ... an asset is something I own. I may acquire more, or dispose of what I have.
    ... a resource is something I use.
     

    Thomas Tompion

    Senior Member
    English - England
    Back to a less-specialist perspective, this has been my simple view despite many years of accountants trying to persuade me otherwise.
    ... an asset is something I own. I may acquire more, or dispose of what I have.
    ... a resource is something I use.
    But don't you own resources, too, Panj? Like the man/hours you are prepared to put in?
     

    Thomas Tompion

    Senior Member
    English - England
    No, no more than I own the electricity I use.
    This is interesting: I think you are saying you don't own it because it's what I call a flow. How about the electricity from a windmill on your farm? I have a friend who sells that to the National Grid for enormous sums. If he doesn't own it, how can he sell it?
     

    panjandrum

    Lapsed Moderator
    English-Ireland (top end)
    I suspect we are talking about the difference between an economist's view of the world and an accountant's view of the world.
    As I am neither, my ability to explain how the electricity that I am able to generate is not an asset is negligible.
     

    cuchuflete

    Senior Member
    EEUU-inglés
    Acquaintanceships with people in other companies and in government are things I may use, but do not own in
    any legal or financial sense, yet they are valuable resources. If I have a windmill, the wind is a resource I may use to economic advantage, but I surely do not own it.

    I agree with liliput and Panj about the ownership distinction between assets and resources.

    One more example before I fall asleep: Years ago I spent a month in Madagascar looking at brightly colored chameleons and all sorts of fascinating lemurs. For the tour guides, these were a critical resource in their
    business. These creatures were the basis of their livelihood. They were not owned by anyone.
     

    Thomas Tompion

    Senior Member
    English - England
    Acquaintanceships with people in other companies and in government are things I may use, but do not own in
    any legal or financial sense, yet they are valuable resources. If I have a windmill, the wind is a resource I may use to economic advantage, but I surely do not own it.

    I agree with liliput and Panj about the ownership distinction between assets and resources.

    One more example before I fall asleep: Years ago I spent a month in Madagascar looking at brightly colored chameleons and all sorts of fascinating lemurs. For the tour guides, these were a critical resource in their
    business. These creatures were the basis of their livelihood. They were not owned by anyone.
    Sorry, I deleted that message because I posted by mistake before I had started.

    Cuchu,

    You say that you and Panj and Liliput are agreed about the main distinction between assets and resources being that assets can be owned whereas resources cannot.

    Now this is a highly heterodox idea, and I shall try to explain why, by taking the examples you yourself cite.

    I take it that by ownership we mean having a proper title to something, in the sense that one can legally sell it.

    Acquaintances with people in other companies and government are indeed valuable resources and you say people do not own them. Now a company over time builds up many such valuable contacts, just as it, if it makes good products, can develop a reputation for excellence and trustworthiness. All these things become part of a valuable collection of attributes, which constitute an advantage it has over a similar company just starting up. They are known collectively as the good-will of the company, and the good-will of the company is marketable. When DaimlerChrysler bought Chrysler for $36 billion it had to value much more than the tangible assets of the company (the factories, the stocks). The good will is an asset, not a resource, though it produces a flow of value, which many people would regard as a resource.

    The wind whose energy is harnessed by my windmill is a resource - we agree about that too - economists call it a public good: something which can be enjoyed by everyone, something where my using it doesn't inhibit you from using it too, like radio waves. But when I use that resource to produce electricity, that electricity, also a resource, surely, is mine - I can sell it to the National Grid. Notice how you shifted my example: I had talked about the electricity; you, seeing the problem, I expect, chose to talk about the wind.

    The animals in Madagascar are not owned by anyone, but the tour guides can sell tours to go to see them, so your example is very like that of the wind and the electricity. The flow of pleasure they give can be marketed by people, who, either by privileged knowlege about where they can be found, or through having restricted rights of access to them, can deny it to people who don't pay them for the tour. You may say that doesn't make the animals (a resource in your view) owned by anyone: I'd agree about that. But the only sense in which they are an economic resource (and you talk about their value to the economy of the island) is if the flow of services - the pleasure of looking at them in the wild - can be marketed, and you can't legally market something which you don't own.

    Take another example, which is meant to illustrate the difference between stocks and flows in the context of ownership: the case of property. Suppose you own your house. You can enjoy the flow of services it provides for you (shelter, convenience, etc.) by living in it yourself, and those services are surely a resource; yet you say one doesn't own a resource, only an asset. Now you can sell your asset, your house, in the ordinary way. But you can also sell the resources it provides, by letting it. People will pay you ever so much a week for living in your house: you are selling them that flow of services, those resources, BECAUSE YOU OWN THEM.
     

    tomandjerryfan

    Senior Member
    English (Canada)
    What is the difference between "asset" and "resource"? How do you paraphrase this two sentences?

    Your greatest asset is your earning ability. Your greatest resource is your time
    Keeping it simple, assets are resources that you own and that you have full rights to. Resources are just things that you use; they may not be owned by you personally.
     
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