Fixed assets—also known as tangible assets or property, plant, and equipment (PP&E)—is an accounting term for assets and property that cannot be easily converted into cash. The word fixed indicates that these assets will not be used up, consumed, or sold in the current accounting year. Yet there still can be confusion surrounding the accounting for fixed assets.
Virtually all businesses have a fixed asset investment. Fixed assets are used in the production of goods and services to customers. This investment can range from a single laptop to a fleet of trucks to an entire manufacturing facility or an apartment building for rent.
For most businesses, fixed assets represent a significant capital investment, so it is critical that the accounting be applied correctly. This article covers some key facts to understand and insights to keep in mind.
Length: 3 pages (PDF 122 kB)