In the era of the hegemony of machine labor and the complete automation of production, the main variety of assets that a company possesses simply cannot but be fixed assets. Fixed assets of the enterprise include all equipment that, one way or another, is involved in the technological process and transfers its value to the value of the product gradually through depreciation.
If we explain this in a more accessible language, then the fixed assets during the production cycle do not cease to exist and continue to work until they fail due to a breakdown, or are not replaced with new equipment. A typical example of fixed assets is a machine or computer. On the other hand, current assets in the production process are destroyed in order to produce the final product. For example, milk, which is used to make cheese.
Thus, it is simply impossible to mix up fixed and current assets of an enterprise , if this difference is understood. The former are more significant, as they are the pillar of the technological process. In fact, it is the possession of rights to fixed assets that makes it possible to call a person the owner of the enterprise and recognize his right to profit.
Suppose that only working capital would be needed to produce a product. Then any person could organize his small business by buying raw materials and returning the money spent using the income received. However, the fixed assets of the enterprise They are very expensive and pay off after a long period of time, which is why the company needs an investor who invests in fixed assets in order to receive future profit.
Of course, today there is no division into ownership of various assets, since the investor receives a certain share of all assets of the enterprise into ownership. However, the development of capitalism is based precisely on private ownership of fixed assets. And so far, many political parties raise the question of the legitimacy of transferring fixed assets to private hands.
Assume that the fixed assets of the enterprise not will be owned by investors today is almost impossible, but such a form of ownership as workers' cooperatives seems quite promising. One way or another, all private business rests on fixed assets, and it is to them that we owe our technological progress.
However, a rather unpleasant tendency to underestimate fixed assets has been noticed recently. The share of fixed assets in the balance sheet of the enterprise becomes catastrophically low due to unreasonably high valuation of financial liabilities and intangible assets. Do not forget that the first and second directly depends on fixed assets, and it is the fixed assets of the enterprise that determine its real prosperity, and at the macro level the state of the economy of the whole country.
Underestimation of fixed assets threatens to inflate the financial bubble, which has already provoked a powerful economic crisis. In addition, analysis of the security of the enterprise with fixed assets shows distorted numbers, because the focus is today on the promotion and creation of the brand, and not on technical re-equipment.
Artificial decline in the role of fixed assets can slow down, if not stop, the development of our civilization. Indeed, if previously equipping the enterprise with fixed assets largely determined its market value, today brand value is of primary importance. Thus, all the efforts of mankind are aimed at competing, while progressive development is fading into the background.