Fixed assets
Learn what fixed assets are, see examples, and how they're depreciated in New Zealand.
Published Thursday 23 July 2026
Table of contents
Key takeaways
- Fixed assets are resources you buy for long-term use, not to sell for cash within 12 months. They're also called property, plant and equipment, or PP&E.
- Common examples include buildings, land, vehicles, machinery, computer equipment and furniture.
- Most fixed assets lose value over time, so you spread their cost across their useful life through depreciation. Land is the exception.
- In New Zealand you can claim depreciation on assets you keep longer than a year, and the Investment Boost lets you claim a one-off 20% deduction on eligible new assets.
What are fixed assets?
Fixed assets are resources you buy for long-term use in your business, rather than to sell for cash within 12 months. They're also known as property, plant and equipment, or PP&E.
You use these assets to run and grow your business over several years, from the premises you work in to the vehicles you drive. Because they stay in your business for the long haul, they're treated differently from the day-to-day resources you turn over quickly.
Key characteristics of fixed assets
Fixed assets share a few traits that set them apart from other resources on your balance sheet. Look for these features when you're working out whether something counts.
- They're tangible, physical items with a useful life of more than a year
- They provide long-term benefit to your business and aren't sold to customers
- They're illiquid, so you can't easily convert them to cash within a year
- They're subject to depreciation over time, with land as the exception
Fixed assets vs current assets
The main difference comes down to how quickly you expect to turn an asset into cash. That timing decides where an asset sits on your balance sheet and how you account for it.
Current assets are resources you expect to convert to cash within 12 months, such as cash itself, inventory and accounts receivable. Fixed assets are held for much longer and lose value gradually through depreciation.
Fixed assets sit under a broader group on the balance sheet. Because you hold them for more than a year, each one is a non-current asset.
Examples of fixed assets
Fixed assets cover a wide range of items, and the ones you own depend on the type of business you run. Here are some common examples.
- Buildings
- Computer equipment and software
- Furniture
- Land
- Vehicles
- Machinery
How fixed assets are depreciated in New Zealand
Depreciation spreads the cost of a fixed asset across the years you use it, rather than claiming it all at once. Most fixed assets are depreciated this way, with land as the exception because it doesn't wear out.
In New Zealand you can claim depreciation on business assets you keep for longer than a year. As you claim it, the amount builds up as accumulated depreciation, which reduces the asset's value on your books.
Low-value assets that cost under NZ$1,000 can generally be written off in full in the year you buy them, rather than depreciated over time. The Investment Boost also lets you claim a one-off 20% deduction on the cost of eligible new assets in the year they're first used.
Why fixed assets matter for your business
Fixed assets do more than sit on your balance sheet. They play a practical role in how your business runs and how others value it.
- They support your day-to-day operations and production
- They add to the overall value of your business
- They can be used as security when you apply for a loan
Manage your fixed assets with Xero
Keeping track of what you own, its value and how much it's depreciated gets harder as your business grows. Xero brings your assets together in one place, so you can record purchases, run depreciation and see up-to-date values without the manual admin.
You can manage fixed assets in Xero alongside the rest of your finances, and you can try it out and get one month free.
FAQs on fixed assets
Here are answers to some frequently asked questions about fixed assets.
Is a car a fixed asset?
Yes, a car your business uses for more than a year counts as a fixed asset. You depreciate it over its useful life, the same as other vehicles.
Are fixed assets current or non-current assets?
Fixed assets are non-current assets. You hold them for more than 12 months, so they don't count as current assets.
What are net fixed assets?
Net fixed assets are the cost of your fixed assets minus accumulated depreciation. The figure shows the current book value of what you own.
Which fixed assets are not depreciated?
Land is the main fixed asset you don't depreciate. It's expected to hold or grow its value rather than wear out over time.
Related Terms
Learn more about fixed assets
Handy resources
Advisor directory
You can search for experts in our advisor directory
Xero Small Business Guides
Discover resources to help you do better business
Fixed assets in Xero
Manage your fixed assets with easy-to-use accounting software
Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.