What is a fixed asset?

A fixed asset is one of two major categories of physical property for a company and includes those items that remain in one location during business operation. Fixed assets do not include movable assets or inventory items that are consumed in a production process.

Typical fixed assets include buildings, furniture, large pieces of equipment, and systems such as lighting and heating, ventilating, and air conditioning (HVAC). Fixed assets are usually one-time investments and have longer life spans.

Tracking Fixed Assets

Even though fixed assets do not move around a facility, are not consumed, and have a lower risk of theft, it is important to track them for several reasons. First, most fixed assets depreciate over time so a centralized computer system must track that depreciation and account for the value of fixed assets on the business balance sheet.

Second, fixed assets include critical equipment, which must be maintained over its lifetime to work efficiently. By tracking these critical fixed assets, a company can schedule preventive maintenance tasks based on time, usage, or asset performance.

Finally, some fixed assets play a role in regulatory compliance. For example, petroleum and chemical companies must ensure that their fixed assets are not leaking volatile compounds into the environment. Fixed asset tracking in this case can help prove that the business is within compliance.

How to Do It

Several asset tagging options are available to help companies track and managed fixed assets. Asset labels can be adhesive and made from a variety of materials to withstand harsh environmental conditions. A variety of barcode labels are often adhesive. In addition, more sophisticated tagging systems such as RFID tags can be attached to fixed assets as well. These may be particular useful on assets that are located off-site.


Anytime you can achieve a better understanding of your fixed assets, you can make smarter business decisions.

According to Small Business Trends, one company saved $100,000 in maintenance costs by eliminating assets it was no longer using.

In addition, understanding the value of fixed assets as well as lifespan and repair records can help a company make financial decisions about repairs, re-building or replacement.