Fixed assets are long-term investments made by a business, such as buildings, vehicles, and equipment. These investments have a useful life of more than one year and can be used to generate income or increase the value of a business. They are important assets because they represent the majority of non‐cash assets in the current asset section of the balance sheet. Fixed assets typically have a large effect on cash flows since they are depreciated over a period of time instead of being depreciated as expenses immediately. They can also be sold at any time, allowing businesses to turn fixed assets into liquid cash.
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