What are fixed assets anyway?

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According to the Commercial Code, fixed assets include all (tangible as well as intangible) objects of a company that have been acquired with the intention of providing the company with a lasting benefit (which in this case means at least twelve months).

A depreciable asset that is counted as a fixed asset can be, for example, a machine that is used in production for many years but eventually wears out. In this case, the costs of acquisition can be spread over the years in which the machine is in operation in the course of depreciation. Non-depreciable goods are, for example, patents or land. Real estate that generates regular income through renting or leasing does not belong to fixed assets, nor do the private assets of the founder or a partner.

What distinguishes fixed assets from current assets?

Even though it is not clearly regulated by law what belongs to current assets, they can be understood as the opposite of fixed assets. These include all goods that are not acquired to remain permanently in the enterprise, but are sold, processed or consumed in day-to-day business. As a rule, in the case of tangible goods, these are inventories and goods or parts needed for the production of goods. Intangible goods, which belong to current assets, are therefore for example cheques, account balances in exness mt4 download, securities and cash in hand or also outstanding receivables from customers to whom goods have been sent or for whom services have been rendered.

These two types of assets, when added together, make up the total assets of the enterprise.

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What belongs to fixed assets?

One can identify three different areas when listing the things that are counted as fixed assets: tangible assets, intangible assets and financial assets.

1) Tangible assets: Land, machinery and industrial equipment, vehicles, shop and factory equipment. Because company cars and office equipment are included in tangible assets, these often make up the largest share in small firms.

2) Intangible assets: rights, patents, licences and concessions.

3) Financial assets: Participations and shares in companies that belong to the group of companies, bonds and securities for which it cannot be assumed that the company will make a profit with them within one year.

What must be taken into account for tax purposes?

According to § 266 in the Commercial Code, fixed assets belong to the assets in the balance sheet (as do current assets) and are accordingly listed on the left-hand side. Non-depreciable goods are listed with the same value every year. Depreciable goods such as machines or company cars show a loss in value, which is recorded through depreciation. The depreciation period depends on the respective good and is precisely regulated in tables of the Ministry of Finance for the deduction of wear and tear (AfA).