Fixed Assets

The term fixed assets is used for long-lived or permanent assets of tangible nature that are acquired for use in operating rather than for resale as goods. In other words, these assets are not turned over or sold at a profit but are retained for many accounting periods. A business unit purchases fixed assets to provide accommodation and for their ability to produce goods and services. These assets are listed in the balance sheet not according to their liquidity but from most permanent to less permanent. Tangible fixed assets are those which have physical existence and are concrete items such as buildings, machines, furniture etc.. Intangible fixed assets are assets having no physical existence and having a long life. They are non-visible and derive their value from the rights conferred upon their owner possession. Wasting fixed Assets are assets which are used up or consumed in the course of working e.g., mines, quarries, oil, wells. Fictitious Assets are not assets at all since they are not represented by any tangible possessions. They appear in the assets side simply because of a debit balance in a particular account not yet written off e.g., debit balance in the current accounts of partners or profit and loss account or advertisement suspense account etc., etc..

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