The etymology of the word asset leads us to actīvus, a word from the Latin language. The term can be used as a noun or as an adjective: in this case we are interested in its meaning as a noun, denoting the good or the right that has a financial value and is owned by a subject or a company.
And according to Digopaul, fixed is an adjective that can be used to describe what is established according to certain parameters or norms or what is established, consolidated or does not vary.
With these ideas in mind we can advance in the DEFINITION OF fixed assets. The notion refers to the financial or economic asset that does not undergo changes in the fiscal year or during the operation cycle of an entity. These assets are recorded in the accounting statement of a company, in the credit column.
It is important to establish, in addition to what has already been stated, that there are several types of fixed assets. Thus, we come across exactly three:
-Intangibles, which refer to things that cannot be physically touched, as would be the case, for example, of a trademark patent. In addition, this set also includes copyright, franchises, permits, licenses…
-The tangible ones, which are the ones that can be touched. In this case, we would be referring to vehicles, real estate, machinery, tools… In the same way, in this group we can include computer equipment, technical installations, furniture, merchandise…
-Fixed assets that are presented as investments in what are affiliated companies.
Take the case of the shed where a transport company keeps its vehicles. This is a fixed asset of the company since, while it develops its services, it remains the property of the company without registering changes. In this way, the fiscal years can pass without the shed undergoing modifications that alter its value.
Those assets that do change throughout an operating cycle are called current assets. Taking the previous example, the sheets of paper that the transport company acquires to print remittances and receipts are current assets and not fixed because these sheets are modified and distributed within the framework of the firm’s activity.
It is important to establish, in addition to what has already been stated, that there are several types of fixed assets. Thus, we come across exactly three:
-Intangibles, which refer to things that cannot be physically touched, as would be the case, for example, of a trademark patent. In addition, this set also includes copyright, franchises, permits, licenses…
-The tangible ones, which are the ones that can be touched. In this case, we would be referring to vehicles, real estate, machinery, tools… In the same way, in this group we can include computer equipment, technical installations, furniture, merchandise…
-Fixed assets that are presented as investments in what are affiliated companies.
In addition to what is indicated, it is relevant to have knowledge of other series of data on fixed assets in general, such as the following:
-They have a useful life, which is the time during which the company in question uses the same.
-In that mentioned useful life they can influence from the technological obsolescence to the time passing by the utility that they have.
-When accounting for fixed assets, you must look at aspects such as the initial cost.
-The possibility can be given that the aforementioned assets are subject to depreciation, which can be defined as the process consisting of assigning the cost of the asset to expenses according to what is its original cost.
