Question

Describe the nature of property, plant, and equipment (PPE) and intangibles.

Answer 1

Plant , property and equipment are long term assets vital to business operations and not easily converted in to cash .Plant , property and equipment are tangible assets ,meaning they are physical in nature or can be touched . The total value of pp and E can range from very low to extremely high compared to total assets.

Property ,plant and equipment are also called fixed assets meaning they are physical assets that a company can not easily liquidate.

PP and E are long term assets vital to business operation and the long-term financial health of a company.

Purchase of PP and E are a signal that management has faith in the long term outlook and profitability of its company.

Example of property ,plant and equipment includes:-

Machinery ,computers, vehicles ,furniture ,building ,lands.

An intangible asset is an asset that is not physical in nature . Goodwill,brand recognition and intellectual property such as parents ,trademarks and copyrights are all intangible assets . Intangible assets exist in opposition to tangible assets which include land ,vehicles ,equipment and inventory.