What are Net Fixed Assets?

Net Fixed Assets

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Net Fixed Assets

Net fixed assets refer to the book value of a company’s long-term tangible assets after accounting for accumulated depreciation and any impairments. Fixed assets, often referred to as property, plant, and equipment (PPE), are assets that a company plans to use over the long term to generate income, such as buildings, machinery, and land.

The formula for calculating net fixed assets is:

Net Fixed Assets = Gross Fixed Assets – Accumulated Depreciation – Impairments


Net fixed assets represent the remaining value of these long-term assets that is yet to be depreciated or written off and can be used to generate revenue. This measure can provide insight into a company’s investment in long-term assets, the management of these assets, and the company’s capital expenditure strategy.

Example of Net Fixed Assets

Suppose a company called XYZ Manufacturing has the following data for its property, plant, and equipment (PPE):

We can calculate the net fixed assets by subtracting the accumulated depreciation and impairments from the gross fixed assets:

Net Fixed Assets = Gross Fixed Assets – Accumulated Depreciation – Impairments

Substituting the given values:

Net Fixed Assets = $1,000,000 – $400,000 – $50,000 = $550,000

So, the net fixed assets of XYZ Manufacturing are $550,000. This means that after accounting for depreciation and impairments, the company has $550,000 worth of long-term tangible assets remaining to generate revenue.

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