Non-Marketable Assets On the other hand, if the assets cannot be transferred easily, they come under this category. Example: Bank Deposits, Provident Funds, Pension Funds, National Savings Certificates, Insurance Policies etc. Financial Assets In any financial transaction, there should be a creation or transfer of financial asset. Hence, the basic product of any financial system is the financial asset.
A financial asset is one which is used for production or consumption or for further creation of assets. For instance, a buys equity shares and these shares are financial assets since they earn income in future. In this context, one must know the distinction between financial assets and physical assets. Unlike financial assets, physical assets are not useful for further production of goods or for earning income.
For example X purchases land and buildings or gold and silver. These are physical assets since they cannot be used for further production. Many physical assets are useful for consumption only. It is interesting to note that the objective of investment decides the nature of the asset.
For instance if a building is bought for residence purposes, it becomes a physical asset. If the same is bought for hiring, it becomes a financial asset. 12th Commerce Unit - - . .