Fixed Assets

What Are Fixed Assets?

The world of accounting is full of theories and the notions, there are numerous terms that make up our business and one of them is “Fixed Assets”, which is comprised of the overall long-term assets that are tangible in nature and are owned by the business.

Furthermore, there are various organizations in the markets that are using “Fixed Assets” in their production of goods and services. It is worth mentioning that not all companies admit converting or consuming these tangible equipments into cash to make bankable transactions for their business setups.

It should be in our best interest that these touchable items are called the “Equipments”, especially when accountants are on the verge to evaluate the value of the incorporation. Therefore, “Fixed Assets” are brought into consideration, because such elements are liable in getting liquidated in the markets.

Examples of Fixed Assets:

The “Fixed Assets” are induced with the potential to become a part of our business in multiple formats including:

  • Machinery
  • Land
  • Vehicles
  • Software
  • Computer Systems
  • Plants.

It is worth mentioning that such elements are movable, cashable and help companies in achieving their organizational objectives. Quite interestingly, if a company sells wooden products and delivers them to the wholesalers then its delivery trucks are considered as the fixed assets.

Depreciation In Fixed Assets:

Despite being closer to ‘liquidation’ and lending us the opportunity to earn on instant terms, the fixed assets are reduced in value by none other than the process of ‘depreciation’. Furthermore, experts have stated that fixed-assets are not expensed like various other business elements as they’re encountered with periodic depreciation, which affects the market price as well as their condition in due time.