A physical item that is owned by an entity and is reported on its balance sheet (statement of financial position) on the asset side amongst its economics resources, whether for its own use or for sale and disposal. Items owned for own use include physical space, equipment, machinery, furniture, furnishings, instruments and office supplies. Items for sale are either those kept in an entity’s inventory, i.e., those held for sale and for consumption in production of goods/ services for sale.

For example, a commodity is an tangible item that may be traded between market participants: buyers and sellers. In this sense, commodities are marketable goods or wares, such as raw materials, partially processed items, farm products, precious metals, oil, etc. Intangible items/ intangibles (intangible products), such as human labor and services (transportation, marketing, advertising, etc.), are not commodities.