What is a fixed asset?

In a nutshell

A fixed asset is a long-term tangible piece of property or equipment that a company owns and uses in its operations to generate income. Fixed assets aren’t expected to be sold for cash within 12 months.

Examples

• Office building – used by employees for work.
• Warehouse – used to produce goods.
• Computers – used to run the business.
• Furniture – used in the office.
• Vehicles – used to deliver goods.

Key characteristics of fixed assets

• Physical things
• Useful for more than 12 months
• Not directly sold to a firm’s consumers
• Can’t easily be liquidated into cash
• Typically depreciate with time

Sources

• What are fixed assets? – Xero