What type of assets are classified as fixed?

Fixed assets are classified as tangible because they are physical items that are used in the operation of a business and have a long-term utility. These assets include property, buildings, machinery, vehicles, and equipment that are essential for producing goods and services. The key characteristic that defines fixed assets is that they are not easily converted into cash and are meant for long-term use, typically exceeding one year.

In contrast, intangible assets refer to non-physical items such as patents, trademarks, and goodwill. Current assets are items that are expected to be converted into cash or consumed within a year, such as inventory or accounts receivable. Liquid assets are cash or assets that can quickly be converted to cash without losing value. Thus, while all these categories pertain to different types of property and resources businesses may own, it is the tangible aspect that distinctly defines fixed assets.