What is a fixed asset? An asset is something of value that can generate revenue or be converted into cash. A fixed asset is a tangible piece of property, plant or equipment that a business owns but will not consume, sell or convert to cash within an accounting calendar year.
Fixed assets are recorded as noncurrent assets on the balance sheet and are subject to depreciation. Examples of fixed assets include: buildings and facilities, computer equipment and software, furniture, fixtures and fittings, land, heavy machinery and Information about fixed assets help create accurate business valuations and financial reports, which can be crucial in capital-intensive industries (like manufacturing) that require greater investment in equipment. Investors and shareholders use these reports to understand a company’s financial health and, thus, whether to invest more in the business.
