Property, Plant, and Equipment

SeekingAlpha  Mar 23  Comment 
By Nikhil Raheja: Although Ukraine has had its share of political struggle lately, its economy is what is more worrying. The country's economy has been struggling for the last few years. Although Ukraine boasts a highly educated workforce, it has...
Biomass Magazine  Mar 13  Comment 
Maverick Synfuels and Plant Process Equipment Inc. have formed a partnership to manufacture and sell small-scale gas-to-liquids (GTL) plants that convert biogas or natural gas into methanol.
The Economic Times  Jan 28  Comment 
"The next few weeks is important from what is going to be happening on the liquidity coming into the market, than what is going to happen on the interest rates. Rajan also pointed out the changing pattern of the domestic saving," Sinha said.
Channel News Asia  Jan 28  Comment 
The Singapore Economic Development Board (EDB) met its investment commitments in 2013, attracting S$12.1 billion in fixed asset investments and S$7.8 billion in total business expenditure per year.
DailyFinance  Jan 20  Comment 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 01/20/14 -- The JET Group today announced the acquisition of PeakWorks Inc., a leading Canadian brand of fall protection, fall rescue and confined space safety products based in Hamilton, Ontario....
DailyFinance  Jan 15  Comment 
SEATTLE, WASHINGTON -- (Marketwired) -- 01/15/14 -- Peptide Technologies, Inc. (OTCBB:PEPT) is pleased to announce that after 18 years of development and testing, it has commercially launched the first organic-based fouling prevention coatings...
FX Street  Nov 11  Comment 
Asian Market Update: China inflation softer than expected but still at 8-month high; Fixed asset... For more information, read our latest forex news and reports.
Cloud Computing  Sep 23  Comment 
Asset Panda today unveiled a revolutionary new system that automates and simplifies the job of tracking and managing fixed assets – notably industrial equipment, information technology and office equipment. Many ...
Financial Times  Aug 9  Comment 
Losses for bonds will accelerate as equity markets gradually come to accept the Federal Reserve’s tapering of fixed asset purchases


Property, Plant, and Equipment is the total value of a business' most essential assets, which cannot easily be liquidated

Property, plant & equipment (PP&E) are those assets essential to the company's business including (as the name suggests) the property on which the company does business and the equipment essential for the business' continued operations. Often, PP&E assets are tailored to be production specific and as such have little resale value. Over time, the value of these assets are generally depreciated to more accurately reflect their current worth to the company. The term "fixed assets" is often used in place of "property, plant and equipment" and the two terms are functionally equivalent.

It should be noted that while most PP&E assets (such as motor vehicles or computers) depreciate over time, land and buildings can often increase in value depending on local real-estate conditions.

Property, Plant, and Equipment are listed along with Long-Term Investments and intangible assets as non-current assets on a company's balance sheet.

Because PP&E assets are highly illiquid, investors often use the metric as a gauge of how quickly a company can adapt to dramatic shifts in the industry. In theory, companies with high PP&E relative to their total book value are less capable of adapting quickly to new and emerging trends, as they are incapable of converting assets acquired or developed for very specific purposes into cash or other, newly necessary assets.


  • Oil and Gas Co (XYZ) decides to build oil rigs on the site of an oil-well. This costs a total of $3 million, which is added to PP&E on the balance sheet. XYZ's Petroleum Engineers determine that the useful life of the rigs is five years (about how long they think the well will continue to produce oil). Using straight-line depreciation, XYZ lists $600,000 in depreciation costs (3 million / 5) on their balance sheet each year for five years - at which point the rigs are fundamentally worthless to XYZ. It should be noted that even though the rigs represent real value to XYZ over the five years of their usefulness, because they were built for a specific purpose in a specific location and cannot easily be moved or deconstructed and rebuilt, their value is not in any way transferable or liquid. Worst case scenario, they can be sold as scrap metal, but it is highly unlikely XYZ can resell these rigs for anything close to their initial costs.
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