Fixed assets are long-term, tangible assets owned by a business, used in the production of goods or services, and not intended for immediate sale. They typically have a useful life exceeding one year and include items like land, buildings, machinery, vehicles, and equipment. Fixed assets are often referred to as property, plant, and equipment (PP&E) on a company's balance sheet.

These assets are crucial for a business's operations, as they contribute directly to revenue generation and productivity. Unlike inventory or other short-term assets, fixed assets are not sold during the regular course of business. Instead, they are used repeatedly over time and gradually depreciate. Depreciation represents the loss in value due to wear and tear, age, or obsolescence, and it is recorded as an expense, impacting the company’s profitability.

The value of fixed assets is an indicator of a company’s investment in its operations and often reflects its long-term growth potential. They are financed through equity, loans, or reinvested profits, and their management is essential for financial planning and tax purposes. Effective fixed asset management includes regular maintenance and timely replacement to ensure continued operational efficiency and cost-effectiveness.