The chart of accounts classifies fixed assets into three main categories, all under class 2 of the assets.
1. Tangible fixed assets (accounts 21x): physical and tangible items — land, buildings, industrial equipment, furniture, IT equipment, vehicles. This is the most intuitive category.
2. Intangible fixed assets (accounts 20x): non-physical items with lasting value — software, patents, licences, trademarks, goodwill, development costs.
3. Financial fixed assets (accounts 26x and 27x): equity investments, loans granted, deposits and guarantees paid. These represent long-term investments or immobilised receivables.
The common criterion: the asset is intended to remain permanently in the company and serve its operations, as opposed to inventory (intended for resale) and expenses (consumed during the period).
A fixed asset that loses value over time and through use (machine, computer, vehicle) is depreciated: its cost is spread over its estimated useful life.
Numerical example: an SME buys a server for €6,000 excl. VAT, depreciated straight-line over 4 years.
Acquisition entry (on the purchase date):
Note: land and certain financial fixed assets are not depreciated (though they may be impaired).
The distinction between fixed asset and expense affects the period's profit.
| Criterion | Fixed asset | Expense |
|---|---|---|
| Usage period | More than one year | Consumed within the year |
| Balance sheet / P&L | Asset on balance sheet | Profit and loss account |
| Immediate impact | Spread via depreciation | Immediate and full |
| Example | Machine, software | Supplies, rent |
For administrative convenience, low-value minor equipment (typically under €500 excl. VAT) can be recorded directly as expenses, even if they last more than a year, to avoid overcomplicating fixed asset management. Correctly classifying a purchase prevents artificially inflating profit (if an expense is wrongly capitalised) or understating it (the reverse). Accounting software like Orizen maintains the fixed asset register and automatically calculates depreciation provisions each period.
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Essai gratuit 14 jours What the Orizen accounting software module costsThere is no strict legal threshold, but an administrative tolerance allows low-value assets—typically under €500 excl. VAT—to be expensed directly, even if used for more than one year. Beyond this, if the asset is durable and intended for business use, it should generally be capitalised under class 2 and depreciated.
No. Only fixed assets with a limited useful life are depreciated (equipment, vehicles, software, buildings). Land, goodwill and most financial fixed assets are not depreciated, though they may be subject to impairment if their value permanently declines.
A fixed asset is a durable item intended for business use (e.g. a machine in a workshop), whereas inventory is intended to be sold or consumed in the operating cycle (e.g. goods for resale, raw materials). The same item may be inventory for a reseller and a fixed asset for the end user.