Fixed Asset

AAA

DEFINITION of 'Fixed Asset'

A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be consumed or converted into cash any sooner than at least one year's time.

Fixed assets are sometimes collectively referred to as "plant".

To learn more about asset classes, check out "What is the difference between tangible and intangible assets?"

INVESTOPEDIA EXPLAINS 'Fixed Asset'

Buildings, real estate, equipment and furniture are good examples of fixed assets.

Generally, intangible long-term assets such as trademarks and patents are not categorized as fixed assets but are more specifically referred to as "fixed intangible assets".

VIDEO

Loading the player...
RELATED TERMS
  1. Amortization

    1. The paying off of debt in regular installments over a period ...
  2. Accumulated Fund

    The capital fund of a nonprofit organization. Money is directed ...
  3. Balance Sheet

    A financial statement that summarizes a company's assets, liabilities ...
  4. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  5. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
  6. Asset

    1. A resource with economic value that an individual, corporation ...
RELATED FAQS
  1. Why do companies often treat events such as the purchase of an asset or construction ...

    Companies treat events such as purchasing building facilities or other fixed assets as a capitalized cost because they are ... Read Full Answer >>
  2. What are some ways a business owner can reduce unlimited liability?

    Fixed assets become impaired when there is a quick decrease in the value of a fixed asset below its original cost due to ... Read Full Answer >>
  3. How should I evaluate a company with negative cash flow investing activities?

    A company with a negative cash flow from investing activities should be evaluated on the sources and uses of cash under its ... Read Full Answer >>
  4. How can I use cash flow investing activities to determine if a company is growing?

    It is possible to use a company's cash flow from investing activities to determine if that company is growing by looking ... Read Full Answer >>
  5. How does analyzing a bank's financial statements differ from companies in other sectors?

    Just like a nonfinancial service company, a bank has to manage the trade-off between its profits and risks. However, two ... Read Full Answer >>
  6. What are the risks of relying on EBITDA margin data when making an investment?

    There are two specific risks of relying on EBITDA margin data when making an investment decision: the EBITDA margin isn't ... Read Full Answer >>
  7. How do you account for changes in the market value of various fixed assets?

    A company can account for changes in the market value of its various fixed assets by conducting a revaluation of the fixed ... Read Full Answer >>
  8. What is the difference between fixed assets and current assets?

    Fixed assets, also known as property, plant and equipment (PP&E), are tangible assets that a company expects to use for ... Read Full Answer >>
  9. What is the relationship between accumulated depreciation and depreciation expense?

    Accumulated depreciation is the total amount a company depreciates its assets, and depreciation expense is the amount a company's ... Read Full Answer >>
  10. When is it useful to look at a company's fixed asset turnover ratio?

    It is useful to look at a company's fixed asset turnover ratio when an outside observer, such as an investor, wants to know ... Read Full Answer >>
  11. What are some examples of fixed assets?

    A fixed asset is an accounting term used to represent a long-term asset a firm purchases and uses for its production of goods, ... Read Full Answer >>
  12. What are the different ways to calculate depreciation for tangible assets?

    Depreciation is a method used to allocate the cost of a company's tangible assets over the assets' useful life. In other ... Read Full Answer >>
  13. What is the difference between current assets and fixed assets?

    Current assets, or short-term assets, are assets that can be converted into cash within one fiscal year or one operating ... Read Full Answer >>
  14. What is the difference between a fixed asset and a current asset?

    Fixed assets are long-term, tangible assets such as land, equipment, buildings, furniture and vehicles. Fixed assets are ... Read Full Answer >>
  15. What is the difference between tangible and intangible assets?

    Tangible Assets Tangible assets are physical assets such as land, vehicles, equipment, machinery, furniture, inventory, stock, ... Read Full Answer >>
Related Articles
  1. Investing

    What's a Fixed Asset?

    Fixed assets are tangible property that a business uses in the process of producing income. To qualify as a fixed asset, the item cannot be consumed or sold in less than a year. Fixed assets ...
  2. Active Trading

    An Introduction To Depreciation

    Companies make choices and assumptions in calculating depreciation, and you need to know how these affect the bottom line.
  3. Investing Basics

    Reading The Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.
  4. Professionals

    A Close Look At Certified Senior Designations

    We examine the validity of senior financial designations and whether they are worth pursuing.
  5. Investing Basics

    How To Evaluate A Company's Balance Sheet

    Asset performance shows how what a company owes and owns affects its investment quality.
  6. Options & Futures

    Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.
  7. Markets

    Introduction To Fundamental Analysis

    Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
  8. Economics

    Understanding the Top Line

    Top line refers to a company’s gross sales without any reductions for discounts or returns.
  9. Economics

    What's an Allowance for Doubtful Accounts?

    The allowance for doubtful accounts represents the percentage of the accounts receivable the company expects to write-off as uncollectible.
  10. Fundamental Analysis

    Understanding Activity Ratios

    Activity ratios measure how effectively a business uses its assets.

You May Also Like

Hot Definitions
  1. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  2. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  3. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  4. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  5. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  6. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!