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What Are Fixed Assets?

Fixed assets refers to assets intended to be used or held over a long period exceeding one year.

What the item represents

Fixed assets is a category within the assets section of the balance sheet, bringing together assets used or held for business purposes over a period exceeding one year. It is divided into three categories: tangible fixed assets, intangible fixed assets, and investments and other assets.

Points to watch when reading it

Tangible fixed assets are depreciated over their period of use, with their book value gradually decreasing. It can be useful to check the breakdown of fixed assets and whether any impairment losses have been recorded.

This article is provided for general informational purposes only and does not recommend or solicit the purchase or sale of any specific investment method or security. Final investment decisions are your own responsibility.

Frequently Asked Questions

What kinds of fixed assets are there?
They are classified as tangible fixed assets (such as buildings, land, and machinery), intangible fixed assets (such as goodwill and patents), and investments and other assets (such as investment securities held over the long term).
What tends to be true of companies with a lot of fixed assets?
Industries where capital expenditure is central to the business, such as manufacturing and real estate, tend to have a higher proportion of fixed assets. Given that industry characteristic, it can be useful to check how efficiently those assets are being used (for example, the fixed asset turnover ratio).

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