Fixed asset

Fixed assets, as opposed to current assets, are those assets with a remaining useful life of over an year. Following the accruals principal, these assets are shown on the balance sheet but their value is depreciated, and treated as an expense in the P & L account for each year of their life.

There are two types of fixed assets:

• Tangible fixed assets
• Intangible fixed assets

Tangible fixed assets include physical assets such as land and buildings and equipment. Long term financial investments are also considered tangible.

The most important intangible fixed asset is goodwill. Other intangibles includes patents, copyrights and trademarks.