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This question is about employer.
What are fixed assets?
Fixed assets are long-term tangible assets that a business holds, such as property, machinery, or equipment. These assets function as a means of production for the business, and they are not expected to be sold or consumed by the business in the current year.
Fixed assets are long-term assets owned by a company that will last for more than one year. To calculate fixed assets, find the purchase price of each asset and then add up the total. You also need to adjust for depreciation and other factors such as accumulated depreciation, current market value, and scrap value.
An asset is any resource that provides monetary value to a business. It can help the business produce economic value and can be converted to cash. However, not all assets are fixed. For example, cash and accounts receivable are both assets, but they are not long-term physical possessions, so they are not fixed assets.
A business will own fixed assets for one of several reasons:
Fixed assets help a business generate business revenue by creating goods or providing services. An example would be machinery producing goods that can be sold. A business location can be used to provide services to a customer, such as a restaurant, nail salon, or movie theater.
Fixed assets can also be used to rent to other entities or individuals to generate revenue for a business. A parking lot owner can generate revenue by charging fees. Similarly, a landlord could generate revenue by renting out apartments or commercial office space.
A fixed asset may not generate revenue but it aids in the operation of a business or organization. A headquarters building for a corporation or a trade group, for example, provides a central location for the operation to run.
Fixed assets may generate revenue as a sales item. A business that owns its headquarters building, for example, may decide to sell the building to generate cash.
Because of their monetary value, fixed assets can also be used as collateral for a loan.
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