Fixtures are generally classified as current assets or non-current assets depending on their expected useful life and how they are used within a business. To determine whether fixtures are current or non-current, it’s important to understand the definitions of these categories and how they apply to fixtures.

1. What Are Fixtures?

Fixtures are tangible assets that are attached to a property or building and are used to support business operations. Examples include lighting fixtures, shelving units, display cases, and built-in furniture. Fixtures are typically considered property, plant, and equipment (PP&E) because they are long-term assets used in the production or sale of goods and services.

2. Current vs. Non-Current Assets

• Current Assets: These are assets that are expected to be converted into cash, sold, or consumed within one year or the operating cycle of the business, whichever is longer. Examples include cash, inventory, and accounts receivable.
• Non-Current Assets: These are assets that are expected to provide economic benefits for more than one year. They are not intended for sale in the normal course of business. Examples include land, buildings, machinery, and long-term investments.

3. Fixtures as Non-Current Assets

Fixtures are almost always classified as non-current assets because:

• They are used in the business for more than one year.
• They are not intended for sale in the ordinary course of business.
• They are part of the company’s long-term operational infrastructure.

Fixtures are typically recorded under Property, Plant, and Equipment (PP&E) on the balance sheet and are subject to depreciation over their useful life. Depreciation is the process of allocating the cost of the asset over its useful life, reflecting its wear and tear or obsolescence.

4. Exceptions: When Fixtures Might Be Current Assets

In rare cases, fixtures might be classified as current assets if:

• The business plans to sell or dispose of the fixtures within one year.
• The fixtures are part of inventory (e.g., a furniture store selling display fixtures).

However, these situations are uncommon, as fixtures are usually considered long-term assets.

5. Accounting Treatment of Fixtures

• Initial Recognition: Fixtures are recorded at their purchase cost, including any costs necessary to prepare them for use (e.g., installation fees).
• Depreciation: Fixtures are depreciated over their useful life using methods such as straight-line or declining balance.
• Impairment: If the value of fixtures declines significantly, they may be written down to their recoverable amount.

6. Conclusion

Fixtures are generally classified as non-current assets because they are long-term assets used in business operations. They are recorded under PP&E on the balance sheet and are depreciated over their useful life. Only in exceptional circumstances, such as when fixtures are intended for sale within a year, would they be classified as current assets.