{"id":28570,"date":"2023-10-16T12:06:17","date_gmt":"2023-10-16T12:06:17","guid":{"rendered":"https:\/\/swoopfunding.com\/ca\/?post_type=business-glossary&p=28570"},"modified":"2025-04-24T13:53:12","modified_gmt":"2025-04-24T13:53:12","slug":"fixed-asset","status":"publish","type":"business-glossary","link":"https:\/\/swoopfunding.com\/ca\/business-glossary\/fixed-asset\/","title":{"rendered":"Fixed asset"},"content":{"rendered":"

Definition<\/h3>\n

A fixed asset, also known as a tangible or non-current asset<\/a>, refers to a long-term, physical asset held by a company for use in its operations and not intended for sale in the normal course of business. <\/span><\/p>\n

What are fixed assets?<\/h3>\n

Fixed assets are vital for a company’s day-to-day operations and are not expected to be converted into cash within one year.\u00a0<\/span><\/p>\n

Examples of fixed assets:<\/span><\/p>\n

    \n
  1. Property, plant, and equipment (PPE)<\/b>: This category includes buildings, land, machinery, vehicles, and other physical assets used in the production process.<\/span><\/li>\n
  2. Furniture and fixtures<\/b>: Items like office furniture, fixtures, and equipment that are necessary for business operations.<\/span><\/li>\n
  3. Intangible assets (in some cases)<\/b>: Some are classified as fixed assets if they have a finite useful life and meet specific accounting criteria.\u00a0<\/span><\/li>\n<\/ol>\n

    Fixed assets play a direct or indirect role in revenue generation. For instance, machinery in a manufacturing plant directly contributes to production, while an office building indirectly supports the organisation’s operations.<\/span><\/p>\n

    Fixed assets are subject to depreciation<\/a>, which is the systematic allocation of their cost over their estimated useful life. This process reflects the gradual wear and tear or obsolescence of the asset.<\/span><\/p>\n

    Fixed assets are a significant component of a company’s financial position and are disclosed in the balance sheet<\/a>. The accurate valuation and proper accounting of fixed assets are crucial for financial reporting and analysis.<\/span><\/p>\n

    Example of fixed assets<\/h3>\n

    Company ABC, a manufacturing company, has the following fixed assets on its balance sheet as of December 31:<\/p>\n

      \n
    1. Land:<\/strong> $500,000 – The land on which the company’s manufacturing facility is situated.<\/li>\n
    2. Buildings:<\/strong> $2,000,000 – The manufacturing plant and office buildings owned by the company.<\/li>\n
    3. Machinery:<\/strong> $1,200,000 – Specialised machinery used in the production process.<\/li>\n
    4. Vehicles:<\/strong> $300,000 – Delivery trucks and other vehicles used for transportation.<\/li>\n<\/ol>\n

      The total value of fixed assets on Company ABC’s balance sheet is $4,000,000.<\/p>\n","protected":false},"author":1,"template":"","class_list":["post-28570","business-glossary","type-business-glossary","status-publish","hentry"],"acf":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","image_blog":"","image_blog_full":"","image_podcast":"","image_banking":"","image_blog_internal":"","image_blog_medium":"","image_single_banking":""},"post_excerpt_stackable_v2":"

      Definition A fixed asset, also known as a tangible or non-current asset, refers to a long-term, physical asset held by a company for use in its operations and not intended for sale in the normal course of business. What are fixed assets? Fixed assets are vital for a company’s day-to-day operations and are not expected to be converted into cash within one year.\u00a0 Examples of fixed assets: Property, plant, and equipment (PPE): This category includes buildings, land, machinery, vehicles, and other physical assets used in the production process. Furniture and fixtures: Items like office furniture, fixtures, and equipment that are…<\/p>\n","category_list_v2":"","author_info_v2":{"name":"root","url":"https:\/\/swoopfunding.com\/ca\/author\/root\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28570","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary"}],"about":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/types\/business-glossary"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"version-history":[{"count":1,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28570\/revisions"}],"predecessor-version":[{"id":39016,"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/business-glossary\/28570\/revisions\/39016"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/ca\/wp-json\/wp\/v2\/media?parent=28570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}