Fixed Assets

Question 1

Types of fixed assets:

Answer 1

Apart from property, plant and equipment. The fixed assets can be divided into two types: 1) Productive and 2) unproductive

Question 2

Example of productive and unproductive directlyfixed asset

Answer 2

→ Plant, building, and machinery form the largest chunk of the company’s Assets. Productive assets directly contribute to the production function.

→ Any other item that helps in the day to day business but doesn’t directly contribute to production function falls under unproductive fixed assets. these include all furniture fixtures, Office equipment other than plants/machinery, computers
and all Other assets required for company operations.

→productive assets differ for different companies.
like for an It company computers fall into productive assets.

**when a company uses high value assets for productivity, it is a sign of a good company. We want more assets to be tied upfor productive use. This ensures efficient use of capital and healthy returns.
**