Which term refers to assets like buildings and equipment used in business operations?

Fixed assets are a critical category of assets that include long-term physical items used in the operations of a business, such as buildings, machinery, and equipment. These assets are essential for producing goods or services and are not easily converted into cash within a year. Unlike current assets, which can be quickly turned into cash (like inventory or receivables), fixed assets typically have a longer lifespan and are utilized over an extended period.

The classification of fixed assets is important for financial reporting and management, as they require significant investment and affect the company's long-term strategies. These assets are also subject to depreciation, reflecting their usage and wear over time, which can impact the financial statements and tax calculations of a business.

Understanding the distinction between fixed assets and other asset types, such as current assets, which encompass cash or items expected to be turned into cash within a year, or intangible assets like patents and trademarks that do not have a physical presence, is essential for proficient financial analysis and business operation management.