What "capital asset" means in finance

A capital asset is a type of asset that has a long-term useful life and is not intended for immediate resale or consumption. These assets are typically tangible assets, such as property, plant, and equipment (PP&E), or intangible assets, such as patents, copyrights, and goodwill. Capital assets are typically used to generate income for a business or organization, and they are considered essential to the long-term growth and success of the entity. Capital assets are recorded on the balance sheet at their original cost, and their value is generally depreciated over time to reflect their decreasing value due to wear and tear or obsolescence.