Long Lived Assets Unit 2

Fixed Assets

Physical Assets

• Buildings

• Machinery

• Land (does not depreciate)

• Construction in Progress (Does not depreciate)

• Tools 

• vehicles 

• Leasehold improvements 

• Computers 

• land improvements (fences and such) 

Common Term for Cash Price for PPE

CAPEX

Acquiring Fixed Assets

• Initially record fixed assets at the amount paid to acquire the assets and ready it for its intended use

Cash Expenditure

Increases the assets capacity, useful life, or efficiency (engine in a truck)

We capitalize this

Ordinary Repairs

Regular Maintenance, we will probably have to do it again later (oil change)

We expense this immediately