What type of asset is a vehicle that is fully owned by a business?

A vehicle that is fully owned by a business is classified as a fixed asset. Fixed assets, also known as tangible assets or property, plant, and equipment, are long-term physical assets that a business uses in its operations to generate income. These assets are not intended for resale and typically have a useful life extending beyond one year.

Vehicles, being physical objects that a business uses to facilitate its operations, fall into this category. Businesses utilize vehicles for transportation, delivery, or logistics purposes, and they depreciate over time as they are used. This depreciation reflects the gradual wear and tear of the vehicle as it contributes to the company's functions.

In contrast, intangible assets refer to non-physical items such as patents, trademarks, or goodwill, which are not applicable in this case. Real property refers specifically to land and any structures attached to it, which does not include a vehicle. Leasehold improvements involve modifications made to rental properties by a lessee, focusing on enhancing the rented space rather than owned vehicles. Thus, the designation of a fully owned vehicle as a fixed asset is appropriate given its role and characteristics within the business's asset portfolio.