What is Fixed Asset Management?
In brief, Fixed Asset Management is an accounting process that tracks fixed assets with a long asset lifecycle. Fixed Assets, while procured with large capital outlay, are not expected to convert to cash for a minimum of twelve months – they are long-term purchases. Often, fixed assets appear on a balance sheet as equipment, plant machinery and property this is sometimes abbreviated to read PP&E (or referred to as “Capital Assets”. A good example of a company with fixed assets would be a car manufacturing company. The parts used to assemble a vehicle would not be classed as fixed assets because they are consumed quickly so therefore have limited life during the process of manufacturing. However, the large pieces of assembly machinery, the car manufacturer’s factory and the land associated would all be classed as fixed assets, because they have a long-term lifecycle.