Fixed assets, also known as property, plant & equipment (PP&E), are used to produce the goods or services of the company and cannot easily be converted to cash. Fixed assets include equipment such as production machinery, computers, and motor vehicles, as well as land and buildings. These assets are referred to as "fixed" since they remain unchanged in the course of production -- unlike cash, which is used to buy raw materials, which in turn is used to produce finished products. Normally, fixed assets are subject to depreciation and/or amortization.
Often, fixed assets are tailored to be production specific and have little resale value. Oil rigs, for example, are built on site and are not reused after the oil well is depleted. They can be sold as scrap metal, but it is highly unlikely that a company can resell these rigs for the value of new rigs. However, companies record the value of these assets on their balance sheets at the purchase price (including the cost of installation) rather than at resale vale. Similarly, computers decrease in value quickly and can only be resold at a fraction of their original purchase price.
On the other hand, land and buildings can increase or decrease in value depending on local real-estate conditions. Fixed assets are treated as investments (instead of expenses) by companies and receive favorable tax treatment due to a depreciation allowance.