Crown Assets

Crown Assets refer to certain assets or resources owned by the government of a country, democracy, or any ruling monarch of that particular country, having full rights over such assets that cannot be claimed by the public if otherwise sold.

Given below is how crown assets can be categorized.

1. Government-Owned Physical Assets: This may refer to such physical assets that the government directly owns, such as land, buildings, equipment, machinery, etc.
2. Government Administered Assets: This refers to assets that are properties that are constituted as public goods such as public parks, libraries, roads, sewers, water lines, etc.

Given below are some of the examples of assets that the government owns.

• Public Parks
• National Defence and Equipment
• Sewer Systems
• Libraries
• Land
• Consulate Buildings
• Embassies
• State Owned Enterprises

Below are some of how crown assets are beneficial to the country.

• Strengthens the Economy - Any asset or resource which is a property of the government and is used for productive purposes and towards societal benefits, such as roads, libraries, sewer systems, etc., will no doubt develop and strengthen the country as a whole.
• Enhances the Net Worth - Net worth for any entity, be it an individual, corporation, or even the government, is arrived at by deducting the total liabilities from the total assets owned. They act as strong financial resources for the government that will provide benefits in the future. Hence, building up and accumulating such assets enhances the government's net worth.
• Helps During Distress - Whenever there are calamities or any crisis, the government can very well sell such assets, which will generally amount to paying off the debt and help the economy rise. The usage of public goods during times of calamities will help the country's general public. This way, they stand as a strong backing for the government and can be well-made in such situations, and the federal or government can be pretty well assured that they have enough backing to take care of the same.
• Public Benefit - Public goods such as libraries, roads, sewer systems, etc., can be well used for the benefit of the public and for the greater good of the society itself. These stand as criteria to judge how developed a country or economy is. They contribute to the development and enhancement of the standard of living and the betterment of people in any country.
• Surplus Asset Disposal - Any government asset treated or considered as surplus can be disposed of to generate an amount that can be used for productive or betterment purposes. They are usually disposed of through mechanisms such as auctions, and the proceeds from such bids will be used to benefit activities for the masses at large.
• Facilitates Divestments - When a government knows that a certain unit can be well managed in private hands, it can do so by divesting the same so that the unit can now be more efficiently managed in the hands of a private entity. This way, it can reduce the burden of running and managing the unit or entity all by itself. Such actions stand to generate an amount for the government and, at the same time, can hand over control and power to more efficient parties.
• Enhances Rating and Investments - A government with significant assets may be pretty well rated positively by a credit rating agency. A positive rating enhances the confidence of foreign portfolio investors, and they will be assured of the financial soundness of the particular country that it wants to engage in doing business. Such acts may induce further foreign fund inflow into any economy.

Given below are some of the disadvantages that can be attributed to crown assets

• Sale of Assets Reduces Net Worth - A government may act on reason to undertake the sale of such assets for certain purposes. However, the sale of assets brings down the total worth of the government. The government's holding and resources will now be reduced to a smaller number before the sale, and such acts may indicate to other countries of the world that the finances of the particular country are in trouble.
• Misuse  - The politicians may use rampant corruption and misuse of such public assets to serve their personal needs and greed and may indulge in corrupt practices. Such acts lower the soundness of the country and reduce foreign confidence.

Crown assets, no doubt, tend to benefit the country. However, though owned by them, there are certain assets that the government cannot undertake a sale of in times of distress, such as roads.

Crown assets or the assets owned by the government tend to be an important factor contributing to enhancing the country's soundness and wellness, thereby also building confidence among foreign investors to pump in money to any particular country. They tend to act as a strong backing force in times of distress and crisis. The government is well to do to use them efficiently and thus stand to manage the finances and resources of the country.

However, if the country tends to indulge too much in leverage and borrowing, there are high chances that the government may have to undertake a massive sale of the various assets. Such measures stand to reduce the country's net worth and happen to hamper confidence.

It stands as a red signal to the world. However, suppose the economy is prudent enough and efficiently uses such crown assets for the greater good of the public and the betterment of society. In that case, these crown assets will no doubt contribute to the nation's development as a whole.

This article has been a guide to Crown Asset. Here we discuss how crown assets can be categorized and the examples of assets that the government owns. You can learn more from the following articles –

• Hard Asset
• Return on Net Assets
• Net Assets Definition
• Fully Depreciated Assets
• Tangible vs. Intangible