In one sentenceTangible assets the business holds to use in its operations for more than a year, not to sell, such as buildings, machinery, vehicles and furniture.
Simply put
The car your store makes deliveries with is a fixed asset, while the car a car dealer sells is inventory. The difference lies in the purpose, not in the type of thing.
The asset is recorded at its full cost until it is ready for use: the purchase price, transport and installation, and then it is spread over its years of use through depreciation (IAS 16).
Worked example
A factory bought a filling machine for 200,000 SAR and paid 5,000 SAR for transport and 15,000 SAR for installation and testing (amounts before recoverable VAT).
Purchase price200,000 SAR
Transport cost5,000 SAR
Installation and testing cost15,000 SAR
Cost of the asset in the books: 200,000 + 5,000 + 15,000220,000 SAR
Don't confuse it with
InventoryInventory is bought to be sold or used in production, while a fixed asset is bought to be used for years.
in FullScreen ERP
The asset register in the system keeps a card for each asset: category, location, custodian, purchase date and cost. Fixed assets