What type of assets are categorized as fixed assets?

Fixed assets are categorized as long-term tangible assets that a company uses in its operations to generate income. These typically include items such as buildings, machinery, and equipment. They are not intended for sale in the ordinary course of business, meaning they are utilized over multiple accounting periods, providing utility or value over time.

This classification distinguishes fixed assets from other categories. For example, items intended for sale are classified as inventory and are more fluid in nature, while short-term investments represent assets that are expected to be converted into cash within a year, and financial accounts receivable reflect amounts owed to the business by customers. The key aspect of fixed assets is their long-term use and the essential role they play in a company's operations, supporting production and service delivery rather than being readily converted into cash like current assets.