What is a Fixed Asset? Basically, its anything you use in your business to produce income, with a life expectancy of greater than 1 year. Also known as PP&E, for Property, Plant and Equipment, they are tangible items used to produce your product or service - machinery, buildings, computers, etc. Fixed assets are not inventory held for resale, but for production, rental or administrative purposes. Additionally, the cost of the asset must be above the Capitalization Threshold, which is a discussed below. Fixed Assets are Capitalized, not expensed. Capitalization means that instead of the cost of the assets going directly to expense and against your bottom line, the cost is set up as an asset in Fixed Asset Register, and depreciated over time. The length of time is the useful life of the asset. Many companies have set up a table of useful lives based on past experience with various types of assets. If you are a new company,...
Fixed Assets are a key part of your business. Join us as we talk about all aspects of Fixed Assets, from the simple to the complex, from start-ups to multi-national conglomerates, and everything in between.