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Financial Terms | |
Fixed asset |
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Definition of Fixed assetFixed assetAn item with a longevity greater than one year, and which exceeds a company’s Fixed assetLong-lived property owned by a firm that is used by a firm in the production of its income.
Related Terms:Fixed asset turnover ratioThe ratio of sales to fixed assets. Fixed assetsThings that the business owns and are part of the business infrastructure – fixed assets may be fixed assetsAn informal term that refers to the variety of long-term operating Fixed AssetsLand, buildings, plant, equipment, and other assets acquired for carrying on the business of a company with a life exceeding one year. Normally expressed in financial accounts at cost, less accumulated depreciation. Fixed Assets Turnover RatioA measure of the utilization of a company's fixed assets to Intangible fixed assetsNon-physical assets, e.g. customer goodwill or intellectual property (patents and trademarks). ![]() Longer-Term Fixed Assetsassets having a useful life greater than one year but the duration of the 'long term' will vary with the context in which the term is applied. Tangible fixed assetsPhysical assets that can be seen and touched, e.g. buildings, machinery, vehicles, computers etc. accelerated depreciation(1) The estimated useful life of the fixed asset being depreciated is Accumulated depreciationA contra-fixed asset account representing the portion of the cost of a fixed asset that has been previously charged to expense. Each fixed asset account will have its own associated accumulated depreciation account. Accumulated depreciationThe sum total of all deprecation expense recognized to date Business Expansion InvestmentThe use of capital to create more money through the addition of fixed assets or through income producing vehicles. Capital assetA fixed asset, something that is expected to have long-term usage within Capital gainThe gain recognized on the sale of a capital item (fixed asset), calculated Capital InvestmentsMoney used to purchase fixed assets for a business, such as land, buildings, or machinery. Also, money invested in a business on the understanding that it will be used to purchase permanent assets rather than to cover day-to-day operating expenses. ![]() CapitalizeIn Finance: to find the present value of a stream of cash flows. Cash flow from operationsA firm's net cash inflow resulting directly from its regular operations Change in Accounting EstimateA change in accounting that occurs as the result of new information Change in Accounting EstimateA change in the implementation of an existing accounting DepreciationAmortization of fixed assets, such as plant and equipment, so as to allocate the cost over their depreciable life. GoodwillThe excess of the price paid to buy another company over the book value of investing activitiesOne of the three classes of cash flows reported in the Lease (Credit Insurance)Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee. Leasehold improvementThis is any upgrade to leased property by a lessee that will be LeasingContract granting use of real estate, equipment, or other fixed assets for a specified time in exchange for payment, usually in the form of rent. The owner of the leased property is called the lessor, the user the lessee. Margin callA demand for additional funds because of adverse price movement. Maintenance margin mark to marketRefers to the accounting method that records increases Monetary / non-monetary methodUnder this translation method, monetary items (e.g. cash, accounts ObsolescenceThe reduction in utility of an inventory item or fixed asset. If it is an Other assetsA cluster of accounts that are listed after fixed assets on the balance sheet, property, plant, and equipmentThis label is generally used in financial Property, plant, and equipmentThis item is comprised of all types of fixed assets Restrictive covenantsProvisions that place constraints on the operations of borrowers, such as restrictions on Salvage valueThe expected revenue to be garnered from the sale of a fixed asset at the straight-line depreciationThis depreciation method allocates a uniform Total Asset Turnover RatioA measure of the utilization of all of a company's assets to Useful lifeThe estimated life span of a fixed asset, during which it can be expected to Acquisition of assetsA merger or consolidation in which an acquirer purchases the selling firm's assets. AssetAny possession that has value in an exchange. AssetA resource, recorded through a transaction, that is expected to yield a benefit to a AssetSomething that is owned; a financial claim or a piece of property that is a store of value. AssetProbable future economic benefit that is obtained or controlled by an entity as a result of assetAnything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.). AssetAll things of value owned by an individual or organization. Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the Asset-Backed SecuritiesBond or note secured by assets of company. Asset-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts Asset-based financingMethods of financing in which lenders and equity investors look principally to the Asset-Based FinancingLoans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender. Asset classesCategories of assets, such as stocks, bonds, real estate and foreign securities. Asset CoverageExtent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position. Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Asset/equity ratioThe ratio of total assets to stockholder equity. Asset for asset swapCreditors exchange the debt of one defaulting borrower for the debt of another Asset/liability managementAlso called surplus management, the task of managing funds of a financial asset mixThe weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments. Asset pricing modelA model for determining the required rate of return on an asset. Asset pricing modelA model, such as the Capital asset Pricing Model (CAPM), that determines the required Asset-specific RiskThe amount of total risk that can be eliminated by diversification by Asset substitutionA firm's investing in assets that are riskier than those that the debtholders expected. Asset substitution problemArises when the stockholders substitute riskier assets for the firm's existing Asset swapAn interest rate swap used to alter the cash flow characteristics of an institution's assets so as to Asset turnoverThe ratio of net sales to total assets. asset turnovera ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets asset turnover ratioA broad-gauge ratio computed by dividing annual AssetsA firm's productive resources. ASSETSAnything of value that a company owns. AssetsThings that the business owns. AssetsItems owned by the company or expenses that have been paid for but have not been used up. Assets requirementsA common element of a financial plan that describes projected capital spending and the capital assetan asset used to generate revenues or cost savings Capital asset pricing model (CAPM)An economic theory that describes the relationship between risk and Capital Asset Pricing Model (CAPM)A model for estimating equilibrium rates of return and values of capital asset pricing model (CAPM)Theory of the relationship between risk and return which states that the expected risk Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized againstfuture-period revenue. Contra-asset accountAn offset to an asset account that reduces the balance of the asset account. Current assetTypically the cash, accounts receivable, and inventory accounts on the Current assetsValue of cash, accounts receivable, inventories, marketable securities and other assets that Current assetsCash, things that will be converted into cash within a year (such as accounts receivable), and inventory. Current assetsAmounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments. current assetsCurrent refers to cash and those assets that will be turned Current AssetsCash and other company assets that can be readily turned into cash within one year. Deferred Tax AssetFuture tax benefit that results from (1) the origination of a temporary difference Dynamic asset allocationAn asset allocation strategy in which the asset mix is mechanistically shifted in Exchange of assetsAcquisition of another company by purchase of its assets in exchange for cash or stock. Financial assetsClaims on real assets. financial assetsClaims to the income generated by real assets. Also called securities. Fixed-annuitiesAnnuity contracts in which the insurance company or issuing financial institution pays a Fixed-charge coverage ratioA measure of a firm's ability to meet its fixed-charge obligations: the ratio of Fixed Charge Coverage RatioA measure of how well a company is able to meet its fixed Fixed costA cost that is fixed in total for a given period of time and for given production levels. fixed costa cost that remains constant in total within a specified Fixed costA cost that does not vary in the short run, irrespective of changes in any Fixed costsCosts that do not change with increases or decreases in the volume of goods or services fixed costsCosts that do not depend on the level of output. Fixed-datesIn the Euromarket the standard periods for which Euros are traded (1 month out to a year out) are Fixed-dollar obligationsConventional bonds for which the coupon rate is set as a fixed percentage of the par value. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |