Fixed Assets

Fixed Assets are those assets which are used for production or business purposes. Its benefits are obtained by company in many years after its purchasing. These assets are not purchased for selling purposes but only used for trading and providing better services. In these assets, we can include land and building, plant and machinery, vehicles, computers and equipments etc. These assets are shown in the asset side of balance sheet. We charge depreciation on these assets and show depreciation as loss in the profit and loss account of company and deduct current year depreciation from the particular assets in balance sheet. After this, net figure of fixed assets are shown in balance sheet.

Importance of Fixed Assets

1. Fixed assets are very important for business. Without fixed assets, businessman can not perform his duties with best way. All fixed assets make businessman versatile in every activity of business.
2. Fixed assets also increase the efficiency of businessman. Suppose, if I have one computer and there are many works which need higher space, then I will need one more computer for increasing my efficiency.
3. Fixed Assets protect business from many risks. Suppose, if you have your own vehicle, you can reach any place and get opportunity of business without any delay.
4. Good building, good layout, good plant, good machinery also attract the customer and helpful to increase the sales.
5. Physical fixed assets can be seen by us. So, we can realize our business entity suppose, if you have your own business place, you can feel better than if you are working on rented place.