Finance Dictionary : Fixed Asset

Fixed Asset


Learn about Fixed Assets, tangible resources vital for business operations, including real estate, machinery, vehicles, and more. Explore their significance in financial management and accounting.



Fixed Asset – Physical Assets Vital for Business Operations


A fixed asset is a tangible resource integral to the daily operations of a business. These assets are not intended for immediate resale and are acquired to support the company’s core activities. Common examples of fixed assets include real estate properties, machinery, vehicles, office equipment, and infrastructure.


Fixed assets hold enduring value and are typically not consumed or converted into cash during the normal course of business. Instead, they play a crucial role in facilitating production, service delivery, or administrative functions. These assets are often subject to depreciation, which spreads their cost over their useful life for accounting purposes.


Understanding fixed assets is vital for financial management, as they impact an organization’s balance sheet, depreciation expense, and tax considerations. Effective management and maintenance of fixed assets are essential for optimizing business efficiency.


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