fixed assets


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Fixed Asset

An asset with a long-term useful life that a company uses to make its products or provide its services. Strictly speaking, a fixed asset is any asset that the company does not expect to sell for at least a year, but the term often refers to assets a company expects to have indefinitely. Common examples of fixed assets are real estate and factories, which a company holds for long periods of time.

fixed assets

ASSETS such as buildings and machinery that are bought for long-term use in a firm rather than for resale. Fixed assets are retained in the business for long periods, and generally each year a proportion of their original cost will be written off against PROFITS for DEPRECIATION to reflect the diminishing value of the asset. In a BALANCE SHEET fixed assets are usually shown at cost less depreciation charged to date. Certain fixed assets such as property tend to appreciate in value (see APPRECIATION, definition 1) and need to be revalued periodically to keep their BALANCE SHEET values in line with market values. Other fixed assets such as patents, trademarks and GOODWILL are termed intangible assets to distinguish them from tangible assets such as buildings and machinery. All fixed assets are held for the purpose of earning income. See CURRENT ASSETS, REVALUATION, definition 1.

fixed assets

the ASSETS, such as buildings and machinery, that are bought for long-term use in a firm rather than for resale. Fixed assets are retained in the business for long periods and generally each year a proportion of their original cost will be written off against PROFITS for amortization (see DEPRECIATION 2) to reflect the diminishing value of the asset. In a BALANCE SHEET, fixed assets are usually shown at cost less depreciation charged to date. Certain fixed assets, such as property, tend to appreciate in value (see APPRECIATION 2) and need to be revalued periodically to help keep their BALANCE SHEET values in line with market values. See CURRENT ASSETS, RESERVE.

fixed assets

Items on a company's balance sheet—the tangible property used in the business and not for resale; would include buildings, furniture, fixtures, equipment, and land.

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