Definition for : Fixed assets
Fixed Assets include everything required for the operating cycle that is not destroyed as part of it, as opposed to the Current assets. The decrease in the Value of fixed Assets is accounted for through Depreciation, Amortisation and Impairment losses. A distinction is drawn between tangible fixed Assets (land, buildings, machinery, etc, - known as property, plant and equipment in the U.S.), intangible fixed Assets (brands, patents, Goodwill, etc) and investments. When a business holds shares in another company (in the long term), they are accounted for under investments. Accounting policy for fixed Assets can significantly affect the accounting and financial criteria of the financial health of a company (profits, Solvency, etc). The state of a company's fixed Assets is measured the ratio Net fixed assets/gross fixed Assets.
(See Chapters 3, 4 and 11 of the Vernimmen)
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