Net Property/Plant/Equipment

Property, plant and equipment refers to the total fixed assets held by the business. These assets are vital to the business and cannot be easily converted to cash. The assets are expected to generate economic benefits for the business over a period greater than 1 year.

Let’s say a business owns 2 pizza baking ovens valued at Rs.35,000 each, furniture valued at Rs.25,000, a car valued at Rs.6,00,000, fridge valued at Rs.12,000 and an a/c unit valued at Rs.18,000. The property, plant and equipment value of the business would be Rs.7,25,000 (35,000 * 2 + 25,000 + 6,00,000 + 12,000 + 18,000).

This data item is recorded on the assets of the balance sheet.