What does it mean?
Assets that are owned by organizations for long periods which are utilized for generating revenue or long term financial gain are known as that organization’s fixed assets. They are also referred to as capital assets.
Points to remember
- Fixed Assets are a crucial part of any company. If the efficiency of fixed assets for generating revenue is high, this usually means better turnover rates for the company.
- These also play a major role in helping investors choose the companies they want to invest in.
- Except for land, other fixed assets would have to face depreciation to reflect in lost value as assets get used.
Examples: Buildings, manufacturing equipment, land, etc. These cannot be easily converted into cash as the exchange of these assets is not easy.