An asset is a property owned by a person or corporation which has monetary worth, and is something that’s expected to deliver cash and produce earnings for the owner. Fixed assets are a type of asset that has a long-term use, which an individual or company does not expect to sell for at least a year. Fixed assets are otherwise known as non-current assets or property, plant, and equipment (PP&E). In general, fixed assets are not purchased to be sold and are not held to be converted to cash. These are instead obtained for sustained use to be able to create products and services for customers.

In balance sheets, fixed assets are listed under tangible, intangible, or investments. Tangible assets are useful resources of an individual or corporation which are real, actual and physical in nature, rather than hypothetical. Nearly all tangible assets can be readily converted to cash (or are already cash). Land, buildings, motor vehicles, machineries and equipment, bank deposits, and furniture are common examples of tangible assets.

Fixed assets can likewise be intangible. Intangible assets are those resources which cannot be measured physically and can have the chance of earning profits in the future, but are not presently available to be sold for income. As opposed to tangible assets, intangible assets cannot be quickly turned into cash. Trademarks, motion pictures, licensing agreements, broadcast rights, franchise agreements and copyrights are a few good examples of intangible assets.

Fixed assets become a stable source of revenue with time. Fixed assets are very important in businesses. Without these, businesses would fail to grow and ultimately would not be able to create products and services. That being said, it is vital for every company to manage their fixed assets properly. Mismanaging these could result to problems like paying higher taxes, overpaying on insurance premiums and missing out on income tax deductions.

At times of global financial crisis, nobody wants to have a failed business. What is more, no businessman would wish to remove anyone from job. Fixed assets are the framework of any organization. It is for this reason that makes it vital for any company to look closely at their fixed assets and take better care of everything else that it owns.