Fixed Asset Fixed assets are items that are expected to provide a benefit to the purchasing organization for more than one reporting period. When acquired, these items are recorded in a fixed asset account. For accounting purposes, these items are segregated into multiple accounts, based on their characteristics. The following are examples of fixed asset accounts: • Buildings. Includes all facilities owned by the entity. • Computer equipment. Includes all types of computer equipment, such as servers, desktop computers, and laptops. • Computer software. Usually only includes the most expensive types of software; all others are charged to expense as incurred. • Construction in progress. This is an accumulation account in which are recorded the costs of construction. Once an asset (usually a building) is completed, the balance is moved to the relevant fixed asset account. • Furniture and fixtures. Includes tables, chairs, filing cabinets, cubicle walls, and so forth. • Intangible assets. Includes all nontangible assets, such as the costs of patents, radio licenses, and copyrights. • Land. Includes the purchased cost of land, and may also include the cost of land improvements (which are otherwise recorded in a separate account). • Leasehold improvements. Includes the costs incurred to renovate leased space. • Machinery. Typically refers to production machinery. • Office equipment. Includes copiers and similar administrative equipment, but not computers (for which there is a separate account). • Vehicles. Can include company cars, trucks, and more specialized moving equipment, such as fork lifts.
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