Property, plant, and equipment

Accountants define property, plant, and equipment (“PP&E”) as tangible assets used for long-term use to earn profits. They are also known as fixed assets. Examples of PP&E include:

  • Land
  • Buildings
  • Equipment
  • Cars and trucks

PP&E are tangible assets, in the sense that they have physical substance. They are long-term, intended to be used for at least a year (in most cases). And they are used to earn profits. If PP&E is not in use to earn profits, then it might be held for sale (a separate category).

Depreciation

PP&E should be depreciated over its useful life.

Impairments

You should test PP&E for impairments at least once a year, or if something has happened that indicates that it might have lost value.

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