Plant assets, also known as fixed assets, are long-term tangible assets that are used to generate revenue in a companys operations. These assets have a useful life greater than one year and are essential for the production and sale of goods and services. Plant assets can include various categories of assets, such as:
- Land (not depreciated)
- Land improvements
- Buildings
- Building improvements
- Machinery and equipment
- Fixed equipment
- Moveable equipment
- Office equipment
- Furniture and fixtures
- Vehicles
- Software
- Donated equipment
- Other assets and expenditures that meet the criteria.
Plant assets are typically reported on a company's balance sheet under the noncurrent asset section, specifically in the property, plant, and equipment line item. These assets are subject to depreciation, except for land, which cannot be depreciated. Depreciation expense is recorded over the useful life of the plant asset, and each year's depreciation is credited to a contra asset account called Accumulated Depreciation. Accounting rules also require that plant assets be reviewed for possible impairment losses.
