Listen to a Business English Dialogue About Fixed assets
Paisley: Hi Matthew, do you know what fixed assets are in business and finance?
Matthew: Yes, Paisley. Fixed assets are long-term tangible assets that a company owns and uses to generate income, such as buildings, machinery, and equipment.
Paisley: Right, they’re called fixed assets because they’re not easily converted into cash and are expected to provide benefits to the company for more than one accounting period.
Matthew: It’s interesting how fixed assets are recorded on the balance sheet at their original cost, less any accumulated depreciation.
Paisley: Yes, depreciation is the process of allocating the cost of a fixed asset over its useful life to reflect its gradual wear and tear.
Matthew: And companies regularly assess the value of their fixed assets to ensure they accurately reflect their true worth.
Paisley: Absolutely, maintaining accurate records of fixed assets is essential for financial reporting and decision-making.
Matthew: It’s important for companies to properly manage and maintain their fixed assets to maximize their value and utility.
Paisley: Yes, proactive maintenance and periodic upgrades can extend the useful life of fixed assets and enhance their productivity.
Matthew: And companies may also need to dispose of fixed assets that are no longer needed or have become obsolete.
Paisley: Right, disposing of fixed assets involves recording any gains or losses on the balance sheet.
Matthew: Overall, fixed assets play a crucial role in a company’s operations and are key components of its long-term success.
Paisley: Absolutely, Matthew. They represent significant investments that require careful management and strategic planning.