What defines fixed assets in a business?

Fixed assets in a business are defined as items that are intended for long-term use and are owned for more than one year. These assets are not meant for quick resale, but rather are utilized in the production of goods and services or for administrative purposes. Examples include property, machinery, equipment, and vehicles. These assets are critical for a business's operations because they are integral to generating revenue over an extended period.

By holding these assets for more than one year, businesses can capitalize on their long-term value, which is reflected in the balance sheet under non-current assets. Additionally, fixed assets are subject to depreciation, which allocates the cost of the asset over its useful life, impacting financial statements and tax calculations appropriately.