Fixed asset or stock?

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:08AM in AAT student discussion
If a company rents cars out to customers, are they classed as a fixed asset or stock?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Fixed asset or stock?

    I think these cars would be assets as they're used to generate income (not sold themselves) like machinery would be in a factory.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Fixed asset or stock?

    I agree. If the company owns the cars & intends to keep them for more than 12 months they are a fixed asset. <BR><BR>If the company were in the business of selling cars, I would think then that they should be treated as stock, even if they hold them for longer than 12 months. (p.s. if they haven't sold them within 12 months they probably need better salesmen! lol)<BR><BR>Does this sound right?<BR><BR>Glenn

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