Property
Property includes land and land improvements. Land is a special type of fixed asset because its value doesn't deprecate over time. Land improvements such as a road can be deemed as part of the land and not deprecated. In some cases they can be deprecated where they have a useful lifespan. For example, a bridge with a lifespan of 25 years.Plant
Plant refers to buildings and other structures. This is a dated industrial-era term that comes from the manufacturing sector. This is still used by accounting standards to describe any building. For example:Data Center | Factory |
Hotel | Housing |
Office Building | Restaurants |
Retail Location | Telecom Tower |
Warehouse |
Equipment
Any equipment, machine, device or other physical entity that produces future value. Again, this is a manufacturing term that is used for all industries. For example:Appliances | Computers |
Energy Infrastructure | Furniture |
IT Infrastructure | Machines |
Robots | Vehicles |
Intangible Assets
It can be difficult to reliably determine a cost of an intangible asset. Likewise, intangible assets often have questionable future value. As such, the criteria for capitalizing intangible assets are quite stringent. Some costs of intellectual property can be considered fixed assets. For example, legal fees for establishing and defending a patent. Likewise, any intangible value that you buy from another firm can be considered a fixed asset because this establishes a cost. For example, if you purchase a trademark from a competitor. Software purchases are fixed assets and certain costs for developing software for internal use can often be considered a fixed asset. In some cases, it is not possible to amortize intangible assets because they are considered to have an indefinite lifespan.Contractual Rights (e.g. Franchise Agreement) | Copyright |
Goodwill | Patent |
Software | Trademark |
| Overview: Fixed Asset | ||
Type | ||
Definition | An asset that is likely to produce future benefit that has an unambiguous cost and can't be easily converted to cash. | |
Also Known As | Property, Plant & EquipmentPP&ECapital AssetCapital | |
Related Concepts | ||
