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Welcome, everyone.
Today, we're discussing
tangible assets
and their role in
business accounting and
financial management.
Tangible assets, also known as
tangible fixed assets or
property plant and equipment,
are physical items
a business owns
and uses for multiple years.
These assets are essential
for company operations,
producing goods,
providing services,
or supporting administration.
Examples include
land, buildings,
machinery, vehicles,
and equipment.
Unlike intangible assets,
tangible assets have
physical form and appear on
the balance sheet as
long term resources.
Tangible assets are recognized
on a company's balance sheet.
When there is a
reasonable expectation,
they will generate future
economic benefits,
and their cost can be
measured reliably.
At initial recognition,
tangible assets are recorded at
purchase or construction cost,
including necessary expenses
like delivery or installation.
In the United Kingdom and
many other countries,
this is called the
historic cost.
After acquisition,
businesses decide
whether to carry these assets at
original cost less depreciation
or to revalue them to
current market value.
Tangible assets, except land,
generally have a
finite useful life.
They wear out, become obsolete,
or lose value over time
as used in business.
Depreciation
allocates the cost of
a tangible asset as an
expense over its useful life,
matching the assets expense
to the revenue it generates.
Methods include straight
line and reducing balance.
Key factors are the assets cost,
