Property, Plant, and Equipment

The Economic Times  Jul 11  Comment 
LIC is doing due diligence of IDBI Bank, its assets, debt position and fixed assets.
The Economic Times  Jun 26  Comment 
At the end of March, IDBI Bank had fixed assets of Rs 6,771 crore.
The Economic Times  Jun 24  Comment 
The company has also lined up some of its non-core fixed assets for sale in 2018-19.
Financial Times  Apr 17  Comment 
Groups’ record spending on fixed assets powers economic gains after 2017 slowdown
The Economic Times  Feb 19  Comment 
This followed media reports that the country's second largest bank was in process to monetise its fixed assets in the wake of Rs 11,400 crore fraud.
OilVoice  Feb 8  Comment 
Precision Polymer Engineering's EnDura® V91K is now approved to Shell MESC SPE 85/301 follow ...  Feb 23  Comment 
I began studying economics at night school in Leeds in the 1950s and continued, at various institutions, as an external student of London University. Our courses were broadly, but not uncritically, Keynesian. We abjured fancy equations and...  Dec 21  Comment 
AMSTERDAM (dpa-AFX) - Fixed asset investment in the Netherlands grew at a sharply slower pace in October, marking the weakest outcome in nearly two years, as spending on infrastructure and production of cars declined, the Central Bureau of...
The Economic Times  Dec 9  Comment 
Subsequent to the September quarter, the company has sold certain fixed assets with carrying value of Rs 53.71 crore for Rs 11.46 crore.
The Economic Times  Nov 29  Comment 
Such corporates witnessed a decline in the proportion of their fixed assets to total assets to 52% in the financial year 2015-16 from 71% in fiscal 2010-11.


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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