Accounting glossary

Fixed assets

What fixed assets are, the tangible vs intangible split, and how Xero and QuickBooks fixed-asset registers tie to per-country depreciation rules in 2026.

By ExpenseFlow team
· 18 May 2026

Definition

Fixed assets are long-lived tangible and intangible assets a business holds for use in operations rather than for resale. They are presented as non-current assets on the balance sheet at cost less accumulated depreciation (for tangibles) or amortisation (for intangibles). Common examples: vehicles, equipment, buildings, fixtures and fittings, IT hardware, software licences, customer relationships acquired in a purchase, and goodwill from a business acquisition.

What fixed assets mean in practice

For a bookkeeper, fixed assets are the part of the balance sheet that needs the most ongoing maintenance. Every fixed asset must be tracked in a register with its purchase date, original cost, useful life, depreciation method, accumulated depreciation, and net book value. The register feeds the monthly or annual depreciation journals and the year-end disclosure in the statutory accounts.

The fixed-asset workflow has three recurring events. Acquisitions: a new asset is added to the register with its cost and a depreciation start date. Disposals: an asset is removed from the register; any gain or loss on disposal (sale proceeds minus net book value) hits the income statement. Depreciation: each period (monthly or annually) a journal posts depreciation expense and increases accumulated depreciation. Modern accounting platforms (Xero, QuickBooks Online) have built-in fixed-asset modules that handle all three automatically once the asset is set up.

A practical example: a UK consultancy buys a MacBook Pro for 2,400 on 1 April 2026. The bookkeeper adds it to Xero’s fixed-asset register with a 3-year useful life and straight-line depreciation. Annual depreciation: 800. Monthly: 66.67. Each month, Xero auto-posts: debit depreciation expense 66.67, credit accumulated depreciation 66.67. At 31 March 2029, the laptop’s net book value is zero (cost 2,400 less accumulated depreciation 2,400). It can stay on the register at NBV zero or be disposed of when retired from use.

How fixed assets work by country

United Kingdom

FRS 102 Section 17 covers tangible fixed assets (property, plant, and equipment); Section 18 covers intangibles. Initial recognition at cost (purchase price plus any directly attributable costs of bringing the asset to working condition). Subsequent measurement at cost less accumulated depreciation. The Annual Investment Allowance (up to 1 million per year) and full expensing (companies only, no cap on new main-rate plant and machinery) govern tax treatment for most plant and machinery acquisitions.

Australia

AASB 116 covers tangible fixed assets; AASB 138 covers intangibles. Tax depreciation under Division 40 of the Income Tax Assessment Act 1997 uses effective lives from Taxation Ruling TR 2024/4, updated annually. The small business instant asset write-off (up to AUD 20,000 per asset, extended through 30 June 2026) provides accelerated tax deduction for SMBs under AUD 10 million turnover.

Canada

ASPE Section 3061 (property, plant, and equipment) and Section 3064 (intangibles) for private companies; IAS 16 and IAS 38 for IFRS adopters. CRA Capital Cost Allowance (CCA) classes determine tax depreciation: Class 50 (computer equipment, 55% declining balance), Class 8 (most office furniture and equipment, 20%), Class 10.1 (passenger vehicles above the CRA’s prescribed cost ceiling). The half-year rule limits first-year claims to half the normal rate.

New Zealand

NZ IAS 16 covers tangible fixed assets; NZ IAS 38 covers intangibles. Inland Revenue prescribes depreciation rates by asset class in the Depreciation Rates schedule. Low-value assets under NZD 1,000 (from 17 March 2021) can be fully expensed in the year of purchase. The fixed-life intangibles regime covers software with a defined useful life.

Singapore

SFRS(I) 16 covers tangible fixed assets; SFRS(I) 38 covers intangibles. Capital allowance under sections 19, 19A, and 19A(2) of the Income Tax Act covers tax depreciation. Section 19 spreads over working life; Section 19A allows a three-year write-off for plant and machinery (one-third per year); Section 19A(2) gives a two-year write-off for assets acquired in qualifying years.

Fixed assets are the non-current asset section of the balance sheet:

See also

For the periodic expense recognition on tangible fixed assets, see the depreciation entry; for intangibles, see amortization.

FAQ

See the answered questions above for fixed vs current assets, balance-sheet presentation, and fixed-asset register requirements.

Questions, answered

Common questions

What is the difference between fixed assets and current assets?

Fixed assets are long-lived (more than 12 months of use) and held for operations. Current assets are short-lived (settle within 12 months) and include cash, receivables, inventory, and prepayments. A 30,000 car held for business use is a fixed asset. A 30,000 inventory of stock held for resale is a current asset. The distinction matters for balance-sheet classification and for ratio analysis.

How do fixed assets appear on the balance sheet?

At cost less accumulated depreciation (for tangibles) or accumulated amortisation (for intangibles). The result is the net book value, which is what appears as the balance-sheet figure. A laptop bought for 2,000 with 1,200 of accumulated depreciation shows as a 2,000 cost less 1,200 accumulated depreciation, net book value 800.

Do I need a fixed-asset register?

Yes, for any business with more than a handful of fixed assets. The register lists every fixed asset by item, with the purchase date, original cost, depreciation method, useful life, accumulated depreciation, and net book value. Xero and QuickBooks have built-in fixed-asset register modules that calculate depreciation automatically. Spreadsheet-based registers are common in micro-businesses but get unwieldy past 50 assets.

Keep exploring

Depreciation

The accounting practice of spreading the cost of a tangible fixed asset (vehicles, equipment, fixtures, IT hardware) over its useful life as

Amortization

The accounting practice of spreading the cost of an intangible asset (software licences, goodwill, patents, customer relationships) over its

Intangible assets

Non-physical fixed assets a business holds for use in operations, including software, patents, trademarks, customer relationships, goodwill,

Capital expenditure (CapEx)

Cash spent on acquiring or improving long-lived fixed assets that will generate economic benefits over more than one accounting period, capi

Capital allowance

The UK tax mechanism that replaces accounting depreciation for fixed-asset tax relief: a system of statutory deductions (Annual Investment A

Balance sheet

A financial statement presenting a snapshot of what a business owns (assets), what it owes (liabilities), and the residual interest of its o

Track fixed assets without spreadsheets

ExpenseFlow keeps your books clean by encoding the rules behind terms like this directly into capture and categorisation.