What is the difference between an asset and a liability?

What is the difference between an asset and a liability Introduction: The Building Blocks of Finance Hello everyone! Welcome to our video on the difference between assets and liabilities. When it comes to financial management, these two terms form the foundation. So, let's dive in! Assets: The Value Holders Assets are essentially anything that holds value. They can be tangible, like real estate or machinery, or intangible, like patents or trademarks. In simpler terms, assets are what you own, and they contribute to your net worth. They can generate income, appreciate in value, or provide essential services. Liabilities: The Obligations On the other hand, liabilities represent what you owe. They can be loans, mortgages, or even pending bills. Liabilities are the financial obligations that need to be fulfilled. While assets add to your net worth, liabilities subtract from it.