What are Fixed Assets? A fixed asset is an item that a business owns to continue to run its business. They are normally owned for more than one year and are not held to sell on to a customer. In the accounts, they are shown as part of the balance sheet.
What types of Fixed Assets are there?
There are three types of fixed assets that may be included in the business accounts:
These are the most common asset that a business may own and include the following: Cars, machinery, computers, buildings, furniture, and fittings. Tangible assets are shown in the balance sheet of the business at cost price and then depreciation is calculated to reduce the balance. To find out more about depreciation and how to calculate depreciation take a look at our depreciation accounting section.
Intangible assets do not have to be a physical item but include things like goodwill, brands, patents, trademarks, and licences. They can be very difficult to put a value on, but these sorts of assets can account for a large proportion of the business’s assets, especially if it is a large organisation with a very well known brand.
These will only be included in the accounts if the business has invested in something like a long term investment and may include a joint venture or purchasing a stake in a different business.
For further reading and information on depreciation and a free asset register, read our section on Fixed Assets.
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