Fixed assets typically stay on a company’s books for at least a year, and are used to help run the business and generate income. Their value decreases over time due to wear and tear, age and obsolescence in accordance with asset depreciation schedules. They take a variety of forms – including land, buildings, vehicles, machinery and furniture – and can be divided into tangible and intangible assets.
Tangible fixed assets
Physical property, such as land, tools, furniture and buildings, are considered tangible assets, along with long-term financial investments – for instance, joint ventures or stakes in other companies. It’s worth noting that all tangible fixed assets undergo depreciation, with the exception of land. This is because the value of land is not considered to depreciate over time.
Intangible fixed assets
Intangible assets include brands, trademarks, patents and various types of licenses that authorize everything from using computer software to selling liquor. Some, such as licenses, have a standard value, while others can be more difficult to put a number on.
Companies can leverage our fixed asset management software to keep track of both tangible and intangible assets, causing them less headaches come tax time.