Skip to main content

Fixed Assets

Fixed Assets (Definition)​

Fixed assets are long-term tangible pieces of property that a firm owns and uses in its operations to generate income.

Key aspects of fixed assets include:

  1. Also known as tangible assets or property, plant, and equipment (PP&E)
  2. Have a useful life of more than one year
  3. Include items such as land, buildings, machinery, and vehicles
  4. Recorded on the balance sheet at their historical cost
  5. Subject to depreciation over their useful life (except for land)
  6. Can be used as collateral for loans
  7. Management of fixed assets is crucial for operational efficiency and financial planning

Understanding fixed assets is important for assessing a companys long-term financial health and operational capabilities.