Fixed Asset

Definition

Long-term assets like buildings, equipment, and vehicles that aren't meant to be sold as part of normal operations. They're on the balance sheet for years and gradually depreciated as they slowly become worthless.

Example Usage

The company's fixed assets included a manufacturing plant purchased 20 years ago that was now completely obsolete but still carried at a 'fair value.'

Origin

Term emerged in industrial accounting as factories and equipment became significant balance sheet items in the 19th century

Fun Fact

Fixed assets are where companies hide obsolete equipment—sometimes it's cheaper to keep depreciating it than to admit it's worthless and write it off.

Source: FASB ASC 360 (Property, Plant & Equipment)

Related Terms

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monetary

Anything related to money, currencies, or the financial systems designed to control how much you're allowed to have. Central banks get very excited about this word.

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equities

Fancy financial speak for stocks—those little pieces of companies you can buy that either make you feel like Warren Buffett or a complete idiot, depending on the day. They represent actual ownership in a corporation, unlike bonds where you're just the company's reluctant banker. The asset class that lets you participate in capitalism's rollercoaster while your stomach does backflips every time the market hiccups.

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Advanced

securitization

The financial alchemy of bundling loans or other assets into securities that can be sold to investors, because why hold boring old mortgages when you can slice, dice, and trade them? This process converts illiquid assets into tradable securities, spreading risk around like a game of hot potato—which worked great until 2008 taught us what happens when the music stops. Banks love it because it gets debt off their books; investors tolerate it for the yields.

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default

The failure to meet financial or contractual obligations on time, or the pre-configured settings in software that nobody bothers to change—both equally problematic in their own ways.

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Blue Chip

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Advanced

carry trade

Borrowing money in a currency with low interest rates, then investing it in assets with higher returns elsewhere, pocketing the difference. Works brilliantly until exchange rates move against you and your 'free money' becomes very expensive.

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