No, property, plants, and equipment, also called PP&E, are not current assets. Current assets are any assets that will provide an economic benefit for or within one year. PP&E are expected to have a useful life significantly longer than a single year. As such, they are considered to be fixed assets. PP&E is also typically illiquid, meaning that they cannot be easily converted into cash.
Is Property, Plants and Equipment a Current Asset? FAQs
PPE is a non-current asset that includes physical items utilized by an organization to conduct its business operations such as buildings, land, furniture, equipment, and vehicles.
No, Property, Plants & Equipment is not considered a current asset as it has a useful life that extends beyond one year from the balance sheet date.
The types of assets included in PPE are items such as land, buildings, machinery, and equipment used to conduct business operations.
PPE is typically reported as a single line item on the balance sheet and includes both cost of acquisition and the associated accumulated depreciation.
It is important to differentiate between current and non-current assets to accurately determine an organization’s liquidity, as well as its capital expenditure plans for purchasing new or replacing existing equipment or property. Additionally, having accurate information regarding asset ownership facilitates stronger financial statements which can be used by investors when evaluating a company's performance and prospects.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
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