Thursday, October 27, 2016

What are Fixed Assets?

Picture showing various fixed assets as an example
Picture showing various fixed assets as an example

Meaning/ Definition:

Fixed assets are assets of a business that are intended to be held, for a long time. Fixed assets are employed for producing goods, rendering services and generally carrying out operations of the organization. 

Fixed assets along with those under development (Capital Work-In-Progress) constitute an important component of tangible assets

The minimum time period of holding is more than one year. If the period for which an asset is held is one year or below, it fall under the category of current asset.


  1. Land
  2. Buildings and civil works
  3. Plant and machinery
  4. Furniture and fixtures
  5. Electrical equipment and installations
  6. Computers and electronic office equipment
  7. Vehicles, aircraft and ships


If the same fixed assets are held as stock-in-trade, that is for sale in the ordinary course of business then for that business those assets are not fixed assets but constitute just inventory.

For example if a business is engaged in the business of purchasing, stocking and selling machines then for that business the machines merely constitute stock-in-trade.

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