What Are Plant Assets?

By Sam Swenson, CFA, CPA – Updated Dec 13, 2024 at 9:46 AM

Key Points

Plant assets are long-term fixed assets used in production, such as machinery and land.
These assets are recorded at cost minus depreciation, impacting balance sheet values.
Depreciation affects both the asset's balance sheet value and a company's net income.

Plant assets are key to a company's production process and are often considered among the most valuable items on the balance sheet. Here, we'll discuss what plant assets are, why they matter, and how they fit into a company's financial circumstances.

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Person wearing construction hat and holding clipboard in factory. — Image source: Getty Images.

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Plant assets: the bottom line

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Regardless of the company you're analyzing, plant assets tend to be those held for long-term use and depreciated over their useful lives. As time goes on, plant assets wear down and must be replaced, although most companies try to extend useful life for as long as possible.

In the end, be careful to distinguish between asset types both on the balance sheet and in practice.

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