Difference Between Inventory and Assets (With Table)

Although Inventory and Assets may appear to be synonymous, they are two different phrases describing what a corporation or organization possesses. It’s crucial to understand and apply the difference between asset and inventory to create good, forward-thinking staff management and communication structure. Let’s look at the distinctions between them.

Inventory vs Assets

The main difference between Inventory and Assets are Inventories are only held for a limited time and are quickly sold, on the other hand, Assets are long-term investments that are difficult to sell. Assets necessitate maintenance, whereas inventory does not. Or in simple words, Inventory is “What you sell” and Assets are “What you own.”

Inventory refers to products, objects, and supplies that a business owns and intends to sell to make a profit. Any trade or production company’s inventory is a valuable asset. Before manufacturing and making the things, it is necessary at many sites within a supply chain.

An asset is a resource with an economic worth that is owned by a person, a company, or a nation. Short-term assets, fixed assets, business assets, and intangible assets are examples of asset classifications. An asset is something that benefits a person or a corporation in the present, future, or prospective.

Comparison Table Between Inventory and Assets

Parameters of Comparison




The accounting of things, component elements, and manufactured goods that a corporation uses in manufacturing or sells are known as inventory.

A resource with the economic worth that a corporation or country possesses or manages with the hope of future gain is referred to as an asset.


4 Types



When inventory value is larger than expected, it has a negative influence on the business brand.

When a corporation’s asset value is high, it is regarded as advantageous to the company.


The longer inventory is kept in the business, the less valuable it becomes.

Assets decline or amortize in value over the years which is useful to the company.


Better inventory accuracy and reduced risk of overselling.

Reduces duplicate purchases and increases awareness of lost items.

What is Inventory?

Inventory management is the process of keeping track of the things, parts, and raw materials that a business consumes or sells. As a business leader, you perform inventory management to ensure that you have sufficient stock on hand and to spot shortages. The act of counting or listing objects is referred to as “inventory.” Inventory is a phrase used in accounting to describe all goods in various stages of manufacturing. It is a current asset. Both shops and producers can keep selling or develop things if they keep stock. 

Inventory models can be made more understandable by using real-world examples. The examples show how various forms of inventory are used in retail and wholesale businesses like Cloth, threads, dyeing, and print designs are among the raw materials and parts used by a T-shirt manufacturer. 

The four primary forms of Inventory: 

Raw materials: The raw materials used by a corporation to develop and finish items are known as raw materials. When a product is finished, the basic elements, such as the oil needed to make shampoo, are usually indistinguishable from their previous state.

WIP (Work in Progress): Things in production, such as raw materials or components, labor, overhead, and even packing materials, are referred to as WIP inventory.

Finished Goods: Items that are ready for sale are known as finished goods.

Maintenance, Repair, and Operations (MRO) Goods: MRO is an inventory (typically in the form of supplies) that facilitates the production of a product or the operation of a business.

Some people, on the other hand, only recognize three categories of inventory, ignoring MRO. 

What are Assets?

A resource with an economic worth that an individual, corporation, or country possesses or manages with the hope of future gain is referred to as an asset. Assets are purchased or developed to raise a company’s benefit from its operations, and they are recorded on the balance sheet. Whether it’s manufacturing equipment or property, an asset can be looked at as something that can cut expenses, produce cash flow, or increase profit in the future.

A piece of property and equipment purchased solely or largely for company usage is referenced as a business asset. Qualitative things, such as intellectual property, can also be included. On the balance sheet, business assets are listed and appraised. They are presented in order of liquidity and historical cost. Most company assets can be amortized or paid directly in the year of acquisition under section 179.

Types of Assets:

Tangible and intangible assets are the two categories of assets. 

Tangible assets are assets that have a tangible shape, such as fixed assets and current assets such as inventories. Non-tangible assets, on the other hand, are assets that do not have a physical form. Intangible assets include intellectual property such as trademarks, copyrights, franchises, and brand awareness and reputation.

Main Differences Between Inventory and Assets

  1. Inventories are short term and can be sold easily, whereas Assets are basically long term and they are not sold easily,
  2. Inventory management does not need maintenance on the other hand Asset management includes maintenance.
  3. Inventory includes spare parts, products, supplies, etc., whereas Assets include items like computers, equipment, furniture, etc.
  4. inventory includes little work per item and directly prepares for sales, while Asset requires cleaning, inspection, and filling steps before preparation for another use.
  5. Inventory reduces the risk of overselling, whereas Assets reduce duplicate purchases.


Inventory and Assets are both concerned with tracking the products that a company or other organization orders, receives, stores, and utilizes in its activities. Inventory is concerned with things that will be sold, whereas asset is concerned with resources that will be used internally but not sold. Also, asset tracking software and inventory tracking software track are different. Inventory software handles the entire process of estimating demand, ordering, and keeping stock on hand, while asset software keeps track of assets that are kept in the company for a long time. Inventory increases customer satisfaction, whereas customers see Assets as a source of trust and competence. There isn’t any chaos behind the scenes.


  1. https://www.sciencedirect.com/science/article/pii/S2590188520300068
  2. https://search.proquest.com/openview/ad780d48266ff648056e00428a570e50/1?pq-origsite=gscholar&cbl=49243