Exploring the Impact of Fixed Assets

Dr. Vijayarengam Gajapathy

Abstract

Fixed assets, also known as property, plant, and equipment (PP&E), are essential components of a company's balance sheet and play a crucial role in its operations and financial performance. This abstract explores the concept of fixed assets, discussing their definition, characteristics, valuation methods, and importance in financial reporting. It also highlights the significance of managing fixed assets effectively to maximize their value and ensure accurate representation in the financial statements. Fixed assets encompass tangible assets that have a long-term useful life and are not intended for sale in the normal course of business. These assets include land, buildings, machinery, equipment, vehicles, and other significant physical assets that enable a company to carry out its operations. Fixed assets are typically recorded at cost, including all expenditures necessary to acquire, construct, or prepare the asset for its intended use.