Fixed Asset Definition

See Also:
Accounting Depreciation
Accelerated Method of Depreciation
Double Declining Method Depreciation
Straight Line Depreciation
Chart of Accounts (COA)
Standard Chart of Accounts
Asset Disposal

Non-Current Assets Definition (Fixed Asset Definition)

In accounting, the fixed asset definition or non-current assets definition is a long-term tangible asset. You can also call fixed assets non-current assets, long-term assets, or property, plant and equipment (PP&E). Fixed assets are often large and illiquid physical assets important to a company’s core business operations.

In addition, fixed assets are long-term. That means that the company will hold them longer than one year or one operating cycle. Therefore, a company will not use up the assets or convert them into cash within one year or one operating cycle. Furthermore, fixed assets are tangible; they are physical property, like real estate, buildings, and equipment.


Download The Know Your Economics Worksheet


Record fixed assets on the balance sheet at their net depreciated value. Net depreciated value is purchase price minus accumulated depreciation. The value of a fixed asset will depreciate over its lifespan, and the amount of depreciated value will accumulate on the balance sheet in a contra-asset account that is subtracted from the value of the fixed asset to get its net depreciated value.

Fixed assets, or non-current assets, are in contrast to current assets. Current assets are short-term assets that are expected to be used up or converted to cash within one year or one operating cycle.

If you want to increase the value of your organization, then click here to download the Know Your Economics Worksheet.

fixed asset definition, Non-Current Assets Definition

Strategic CFO Lab Member Extra

Access your Strategic Pricing Model Execution Plan in SCFO Lab. The step-by-step plan to set your prices to maximize profits.

Click here to access your Execution Plan. Not a Lab Member?

Click here to learn more about SCFO Labs

fixed asset definition, Non-Current Assets Definition

, , ,

No comments yet.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.