While IAS 16 (International Accounting Standard) does not define the term fixed asset,[2] it is often colloquially considered a synonym for property, plant and equipment.
According to IAS 16.6, property, plant and equipment are tangible items that: (a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and
), the value of sales owed to the firm from credit extended (i.e. debtors or accounts receivable), and cash held in the bank.
Non-current (fixed) assets are items of value that the organization has bought and will use for an extended period of time, typically including land and buildings, motor vehicles, furniture, office equipment, computers, fixtures and fittings, and plant and machinery.
[4] These often receive a favorable tax treatment (in the form of a depreciation allowance) in contrast to short-term assets.
Note that the cost of a fixed asset is its purchase price including import duties, after subtracting any deductible trade discounts and rebates.