Fixed asset

Fixed assets (also known as long-lived assets or property, plant and equipment; PP&E) is a term used in accounting for assets and property that may not easily be converted into cash. They are contrasted with current assets, such as cash, bank accounts, and short-term debts receivable. In most cases, only tangible assets are referred to as fixed. While IAS 16 (International Accounting Standard) does not define the term fixed asset, it is often colloquially considered a synonym for property, plant and equipment. According to IAS 16.6, property, plant and equipment are tangible items that: (a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and (b) are expected to be used during more than one period. Fixed assets are of two types: those which are purchased with legal right of ownership (in the case of property, known as freehold assets), and those for which the owner has temporary ownership rights for a stated period of time (in the case of property, known as leasehold assets). A fixed asset can also be defined as an asset not directly sold to a firm's consumers or end-users.