fixed asset

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An asset of a business intended for continuing use, rather than a short-term current asset (such as stock). Fixed assets must be classified in a company's balance sheet as intangible, tangible, or investments. Examples of intangible assets include goodwill, patents, and trademarks. Examples of tangible fixed assets include land and buildings, plant and machinery, fixtures and fittings. Fixed assets must be written off to the profit and loss account over their useful economic life; this is effected by the amortization of intangible fixed assets and the depreciation of tangible fixed assets. An investment included as a fixed asset is shown at its purchase price, market value, or directors' valuation, or using the equity method of accounting (see equity accounting).

Subjects: Financial Institutions and Services.

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