Low-value fixed asset is a term that is used in accounting and refers to such fixed assets whose value is relatively low compared to other fixed assets.
What is a low-value fixed asset? Definition of the term
A low-value fixed asset is an item that has been purchased by an enterprise and has a certain durability and is used for business operations. This can include office furniture, computers or printers. The value of such a fixed asset is low compared to other fixed assets, such as production machinery or cars.
How to record low-value fixed assets?
Low-value fixed assets should be recorded in the company’s books, just like other fixed assets. This can be done with the help of a fixed asset register, which records information about each low-value fixed asset, such as its name, value, date of purchase and other relevant data.
Up to what amount is a fixed asset considered low-value?
Up to what amount a fixed asset is considered low-value depends on the laws of the country and the accounting policy adopted by the company in question. In Poland, it is assumed that a fixed asset is low-value if its value does not exceed the amount of PLN 1000. It is worth remembering, however, that this amount is a gross amount and should be reduced accordingly by VAT, if it was charged when purchasing the fixed asset.
