What are Fixed Assets?

Fixed assets, also known as property, plant, and equipment (PPE), are long-term tangible assets owned by a business for the production, supply, or rental to customers. Within the construction industry, these assets are essential as they are not only used in day-to-day operations but are crucial for long-term business growth. They encompass a broad range of items such as buildings, heavy machinery, land, vehicles, and other tools or equipment. These assets are distinguished by their durability and are not to be sold throughout regular business operations. The value of fixed assets is reflected on the balance sheet and it decreases over time due to normal wear and tear, also known as depreciation. Real estate, construction equipment like cranes or bulldozers, and even software used for project planning are some examples of fixed assets in the construction industry. They are considered investments because their utilization helps to generate income.