Let's say you own a small, quaint 50s-themed coffee shop. You bought a real estate property for the cafe's location then furnished it with industrial-inspired fixtures, pieces of furniture, quirky decors, and of course, high-quality coffee machines. You also own two delivery vehicles: a truck and a motorcycle. All these things that keep your business running, from the apartment space to the high-end coffee making equipment, are called business assets.

Business assets are properties owned and used by a company for their operations and are listed on the company's balance sheet as items of ownership. They come in the form of tangible assets (land, buildings, vehicles, furniture and fixtures, and machinery) or intangible assets or nonphysical assets (intellectual properties including logos, patents, trademarks, and copyrights).

You need both your tangible and intangible assets to keep your business running. Not only these things can help increase your earnings but also can boost the value of your business. How? Here are four facts about business assets and how managing them well can work to your advantage

1. The value of your business assets can change
Each type of asset is valued differently and these values can change over time. It can change due to certain factors, like age, wear and tear, obsolescence, and market conditions. Some depreciate quickly, some slowly. Some assets, like land, appreciate or increase their value over time.

The asset's value can be determined by an appraiser, who creates an appraised value for the purpose of selling the asset, using the asset as a collateral or validating depreciation deductions.

2. Some assets can be capitalized
Capitalized assets are a unique type of business assets – these are primarily business costs turned into assets rather than expenses. When your company throws money (like when you pay employees or settle utility bills), the value of that money is gone. But it's different when you spend money to purchase an asset. Your cash may be gone but the value of that money remains - that's the idea behind capitalization of assets.

By converting the business costs into assets, you spread out the company's expense over the asset's useful life (instead of doing it all at once).

3. Some assets can be depreciated
Every asset is assumed to have a useful life span. For instance, your coffee machines might last for 10 years. The $20,000 you spent on those machines gradually leaves the company as the pieces of equipment age and wear down. Depreciation refers to that gradual reduction in the asset value as time passes by, particularly with regards to age and wear. Such process is an important bookkeeping and tax concept. It is a non-cash expense that can be listed on a tax return.

Depreciation is beneficial to businesses and property investors since it is something you can get a deduction for. You can use depreciating assets to claim tax deductions and expenses, which gives you more income on your profit and loss statement and increases the assets on your balance sheet. You also pay property taxes and you can use tax depreciation to reduce the amount of taxable income reported by your business.

4. Business assets can help you secure a business loan
Planning to get a secured loan to expand your venture? You can use your business assets as a collateral for a secured business loan. Some of the assets you can use as a collateral are equity, vehicles, business inventory, and equipment.

Same with the principle of mortgage and auto loans, a lien is put against your asset. The lien grants the bank or lending institution the right to the asset and you can only sell it and reap profits from it after the loan has been paid off.

Apart from maintaining your assets well, it's important to keep excellent records on your business assets including the information on the asset costs, depreciation and salvage value, repairs and maintenance, appraisals, and other significant data.

Author Bio: Sophie Harris is a resident writer for Depreciator, an Australian-based business specializing in Tax Depreciation Schedules. Being an enthusiast of pursuing financial security herself, she writes and shares self-help articles focused on personal finance, tax planning, and property investing.