Asset groups
Organising the assets list into the groupings you actually think in, and what that changes in the reports.
Once you track more than a handful of assets, the flat list stops being useful. Asset groups are your own headings over it: Retirement, Property, Day-to-day, The company.
What they change
The assets view groups by them, and the net worth reports can break down by them — which is usually more meaningful than a breakdown by asset type, because "retirement" is a thing you think about and "manual investment portfolio" is not.
An asset belongs to at most one group. Groups have an order you control, so the list reads the way you think rather than alphabetically.
Groups versus liquidity
Two different cuts, both useful. A group is your own organising idea; liquidity is a property of the holding itself. Retirement savings and a flat may sit in different groups and both be fixed.
Merging
Two groups merge into one, the assets move, and the empty one goes.