Fixed Asset

Fixed assets are long-term tangible assets that a company owns and uses in its operations to generate income. These include buildings, machinery, vehicles, and equipment, which are not intended for sale in the regular course of business. Fixed assets are recorded on the balance sheet and depreciated over time to account for wear and tear. Proper management of fixed assets is crucial as they represent significant investments and are essential for a company’s productive capacity.

Example

A manufacturing company’s fixed assets include its factory building, production machinery, and delivery trucks, all of which are critical for its daily operations and revenue generation.