Listen to a Business English Dialogue About Fixed asset
Layla: Hi Harper, do you know what a fixed asset is in business and finance?
Harper: Yes, I do. A fixed asset is a long-term tangible asset that a company owns and uses to generate income, such as buildings, machinery, or equipment.
Layla: That’s right. Why are fixed assets important for businesses?
Harper: Fixed assets are essential because they enable businesses to operate efficiently and produce goods or services, contributing to revenue generation and overall profitability.
Layla: I see. How do businesses account for fixed assets on their balance sheets?
Harper: Businesses typically record fixed assets at their historical cost, and then depreciate them over their useful life to reflect their gradual consumption or wear and tear.
Layla: Got it. What are some examples of fixed assets?
Harper: Examples of fixed assets include land, buildings, vehicles, machinery, equipment, and furniture.
Layla: Thanks for explaining, Harper. Fixed assets seem crucial for businesses to sustain their operations.
Harper: You’re welcome, Layla. They are indeed essential for long-term productivity and growth.