Is a Vehicle a Fixed Asset?

A vehicle is normally purchased for use within a business and is not held for resale. Vehicles generally have a useful life longer than one year and are therefore considered to be fixed or long term assets of the business.

The cost of vehicles is recorded in the vehicles account and shown in the balance sheet of the business under long term assets.

Vehicles have a limited life and therefore depreciate over time. An estimate of this depreciation is charged to the income statement each accounting period and represents an expense of the business.

The treatment of fixed assets and the charging of depreciation is more fully covered in our fixed assets tutorials

For further information see the Wikipedia fixed asset definition.

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Last modified March 23rd, 2016 by Team

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