Plant assets definition
/What are Plant Assets?
Plant assets are a group of assets used in an industrial process, such as a foundry, factory, or workshop. These assets are classified as fixed assets if their cost exceeds the capitalization threshold of a business, and they are expected to be used for more than one reporting period. Otherwise, they are charged to expense as incurred. Any asset may be included in the plant assets classification, as long as it contributes to the generation of sales.
Plant assets must also be reviewed for impairment at regular intervals. This classification is rarely used, having been superseded by such other asset classifications as Buildings and Equipment.
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Types of Plant Assets
Plant assets generally fall into three main classifications, which are buildings, equipment, and land. Here are some examples of these asset types:
Furniture and fixtures
Land on which plant assets are situated
Machinery and equipment
Office equipment
Production facilities
Depreciation of Plant Assets
Plant assets are depreciated over their useful lives. The only exception is land, which cannot be depreciated.
Presentation of Plant Assets
Plant assets are reported within the property, plant, and equipment line item on the reporting entity’s balance sheet, where it is grouped within the long-term assets section. The presentation may pair the line item with accumulated depreciation, which offsets the reported amount of the asset.