Why are building,plant,machinery and furniture considerd as fixed assets not current assets?

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It depends on the nature of business.You can't assume that for all firms these commodities are fixed assets.Some of them may be current assets for people who is dealing in these commodities

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Fixed assets are those assets which are not easily convertible into cash quickly... And also they have a long life and give future benefit to the business....eg, computer, plant,furniture.....Current assets are those assets which are easily convertible into cash..... And also they exists only for current year eg, cash , stock etc..

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Because it remain with businesses on long term basis and it is as investment used in production process

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Current assets r the one which r convertable into cash easily n quickly within a yr such as Prepaid expenses, Accounts receivable, InventoryFixed assets r purchased for long-term use and are not likely to be converted quickly into cash, such as land, buildings, and equipment.

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Because these can not be sold or purchased every year . these are purchased once and used for a long time period because these are of high value.

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Fixed assets involved huge cost and give benefit in future. These are not converted in cash quickly.

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Because the require huge investment and are not liquid and cannot be converted into cash

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These are the assets which are purchased for long-term use and are not likely to be converted quickly into cash.

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Those assets which can be converted into cash within one year are treated as current assets in the balance sheet for example:  Investments,prepaid expenses etc but buildings plant and machineries and furniture's Are not likely to be converted into cash quickly and moreover these are purchased by the company for a long term use hence they are called as fixed assets

Answer

Introduction:
Fixed assets are long-term tangible assets owned by a company that are not intended for sale or conversion into cash within a year. These assets are expected to be held by the company for an extended period and are crucial for its operations. Building, plant, machinery, and furniture are considered fixed assets rather than current assets due to several reasons.

Key Points:

1. Nature of Fixed Assets:
Fixed assets, such as buildings, plant, machinery, and furniture, are typically acquired for long-term use in the production or provision of goods and services. These assets are not intended for immediate resale or conversion into cash. They are vital for the company's operations and contribute to generating revenue over an extended period.

2. Longevity and Durability:
Fixed assets have a relatively longer useful life compared to current assets. Buildings, for example, can provide shelter and operational space for many years, while machinery and furniture can be used for a significant period before replacement is necessary. These assets are designed to withstand wear and tear and are expected to remain in use for a considerable duration.

3. Significant Investment:
Acquiring fixed assets often involves a substantial financial investment by a company. Buildings, plants, machinery, and furniture require significant capital expenditure, and their value is typically recorded on the balance sheet as a long-term asset. The high cost and long-term nature of these assets make them more suitable for categorization as fixed assets rather than current assets.

4. Contribution to Revenue:
Fixed assets play a crucial role in a company's revenue generation. Buildings provide operational space, plants enable production processes, machinery assists in manufacturing goods, and furniture facilitates a comfortable working environment. These assets directly contribute to the company's ability to produce goods or deliver services, leading to revenue generation over an extended period.

5. Depreciation:
Fixed assets are subject to depreciation, which reflects their gradual loss of value over time due to wear and tear, obsolescence, or other factors. Depreciation is recorded as an expense on the income statement, reducing the asset's value over its useful life. This accounting treatment aligns with the long-term nature of fixed assets and their expected contribution to the company's operations over several accounting periods.

Conclusion:
Building, plant, machinery, and furniture are classified as fixed assets due to their long-term nature, significant investment, contribution to revenue generation, and expected usefulness over an extended period. These assets are essential for a company's operations and are not intended for immediate sale or conversion into cash. By categorizing them as fixed assets, companies can accurately reflect their value, depreciation, and overall financial position on their balance sheets.

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Because fixed assest is part of non current assest basically for consuming long period of time that'sway there considered it.

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They are consider as fixed asset because they are in the business for a long span of time.

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Because they are with us for more than a year

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As building , plant and machinery stated as fixed as u don't buy these on a regular basis and also they r factors of production.

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Because fixed assets are part of non current assets

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Because they cannot be sold and purchased at regular basis in an year

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Bcoz they give benefit 4 long term in future. so these r fixd in nature

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These are considered as fixed assets because:1.They are considered as one time or long term investment for a company.2.They cannot be converted into cash within a year or very short time.3. Their value decreases with time(depreciation).

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Mr Sachin Tendulkar started a new business as on 1st April 2016 with the following assets land and building 60000 machinery 40000 furniture 15000 stock of goods 20000 motor car 25000 cash 20000 bank 35000?

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