On a company’s financial statements, fixed assets appear most visibly on the balance sheet as a single line called “Property, Plant, and Equipment, Net,” listed under non-current assets. That line is only the starting point. To see the full picture of where to find fixed assets on financial statements, you also need to check the income statement (for depreciation expense), the cash flow statement (for capital expenditures and the depreciation add-back), and the footnotes (for the detailed PP&E schedule, methods, and useful lives). Each location answers a different question about the same assets.
The Balance Sheet: The Property, Plant, and Equipment Line
Scroll past current assets like cash, receivables, and inventory. In the non-current assets section you’ll find a line usually labeled “Property, Plant, and Equipment, Net” or “Net PP&E.” This is the primary place fixed assets live.
The word “net” matters. Net PP&E equals the original cost of every fixed asset the company has purchased (gross PP&E) minus the total depreciation recognized to date (accumulated depreciation). Accumulated depreciation is a contra-asset account, which means it sits on the asset side of the balance sheet but reduces the reported total rather than adding to it. What remains after subtraction is the net book value, sometimes called carrying value.
One limitation worth keeping in mind: this figure reflects historical cost, not current market value. A building purchased for $10 million a decade ago might be worth $18 million today, but under US GAAP it will appear at $10 million minus whatever depreciation has been charged. Land is the one major exception to depreciation altogether. Because it doesn’t wear out or become obsolete, it stays on the books at original cost and is never depreciated.1Federal Reserve Board. Financial Accounting Manual for Federal Reserve Banks – Chapter 3 Property and Equipment If land makes up a large share of a company’s PP&E, that will distort any depreciation-based metric you calculate from the single Net PP&E number.
Construction in Progress
Within the PP&E section, many companies show a separate line called “Construction in Progress” (CIP). It captures the accumulated cost of assets still being built or assembled, including interest costs on borrowings used to fund the construction.2FASB. Summary of Statement No 34 CIP is not depreciated. Depreciation only begins once the project is complete and the asset is placed into service, so until then the balance simply grows as costs accumulate. For capital-intensive companies in the middle of a major build-out, this line can be surprisingly large.
Right-of-Use Assets Under ASC 842
Since ASC 842 took effect, companies that lease buildings, equipment, or vehicles must record a “right-of-use” (ROU) asset. It appears in the non-current assets section, sometimes on its own line and sometimes grouped near PP&E. The ROU asset is calculated based on the present value of future lease payments and is amortized over the lease term. Before ASC 842, many operating leases were invisible on the balance sheet, so any comparison of PP&E across periods that straddle the standard’s adoption needs to account for the shift.
The Income Statement: Depreciation Expense
Fixed assets themselves are not a line item on the income statement. What appears there is depreciation expense, the portion of an asset’s cost allocated to the current reporting period. Depreciation is a non-cash expense: it reduces reported profit without any cash leaving the company.
Where depreciation lands depends on what the asset does. Depreciation on equipment used in manufacturing typically gets folded into cost of goods sold, which directly reduces gross profit. Depreciation on office furniture, administrative buildings, and sales vehicles sits lower, within operating expenses. The same company usually has depreciation in both places. If you check only one, you’ll undercount the total.
This split reflects the matching principle: the cost of using a machine to produce goods should hit the books in the same period as the revenue those goods generate. Because depreciation reduces reported taxable income, a company with a heavy fixed-asset base can show significantly lower taxable income than its cash flow would suggest.
The Cash Flow Statement: CapEx and the Depreciation Add-Back
The cash flow statement strips out accounting conventions and shows what actually moved through the company’s bank accounts. Two sections carry fixed-asset information.
Investing Activities: Capital Expenditures
Capital expenditures (CapEx) appear in the investing activities section. This is the cash a company spent to buy new fixed assets or upgrade existing ones during the period.3Deloitte Accounting Research Tool. Deloitte Roadmap Statement of Cash Flows – Investing Activities Cash received from selling old equipment also shows up here, partially offsetting the outflows. Comparing CapEx to depreciation expense is a quick way to see whether a company is growing its asset base or slowly consuming it: when CapEx consistently exceeds depreciation, the base is expanding; when CapEx sits below depreciation for years, the infrastructure is aging without replacement.
Operating Activities: The Depreciation Add-Back
Most companies use the indirect method to report operating cash flow, starting with net income and adjusting for items that didn’t involve cash. Depreciation is usually one of the largest adjustments. Because it reduced net income without any cash leaving the company, it gets added back to arrive at cash flow from operations. The accounting codification is explicit: the indirect method requires removing all items included in net income that do not affect operating cash flows, such as depreciation of property, plant, and equipment.4Deloitte Accounting Research Tool. Deloitte Roadmap Statement of Cash Flows – Form and Content The add-back doesn’t mean depreciation is irrelevant. It means the cash impact was captured when the asset was originally purchased, and that outflow lives in the investing section, not in operating activities each year.
The Footnotes: The Real Detail
The most useful fixed-asset information is not on the face of the statements at all. It’s in the notes. GAAP requires companies to disclose depreciation expense for the period, the balances of major classes of depreciable assets, accumulated depreciation at the balance sheet date, the depreciation methods used for each major class, and the useful lives assigned to major asset categories.
The centerpiece is usually the PP&E schedule, which breaks the single Net PP&E line into components: land, buildings, machinery, vehicles, furniture, and construction in progress. The schedule shows the beginning balance, additions during the year, disposals, depreciation charged, and the ending balance. That reconciliation tells you exactly how much the company invested in new assets, how much it retired, and how quickly the remaining base is aging.
The depreciation methods and useful lives are worth reading carefully. A company depreciating a building over 40 years will show less annual expense than one using 25 years, making the first company’s profits look higher even if the buildings are identical. These policy choices sit in the accounting policy note and are worth comparing across competitors in the same industry.
Where Impairment Losses Appear
Depreciation is a scheduled cost allocation. Impairment is different: it’s an acknowledgment that a fixed asset has lost value in a way the depreciation schedule didn’t anticipate. A factory damaged by flooding, a machine made obsolete by a new regulation, or a retail location in a market that collapsed can all trigger impairment testing.
Under GAAP, impairment testing for fixed assets is not on a fixed annual schedule. It’s triggered when events or changes in circumstances suggest the carrying amount may not be recoverable. The test compares the asset’s carrying value to the undiscounted future cash flows it’s expected to generate; if those cash flows fall short, the loss is measured as the difference between carrying value and fair value.
When recognized, an impairment loss appears in income from continuing operations on the income statement, often as a separate line, not buried within depreciation expense. On the balance sheet, the asset’s carrying value drops by the same amount. The footnotes must explain what triggered the impairment and how fair value was determined, so the notes are again the place to look for context behind a large write-down.
Where to Access the Statements Themselves
For any publicly traded US company, the SEC’s EDGAR system is the most reliable source. The full-text search tool at sec.gov/edgar/search lets you search by company name, ticker symbol, or CIK number and filter by filing type.5U.S. Securities and Exchange Commission. EDGAR Full Text Search The 10-K annual report has the audited financial statements with the most comprehensive PP&E data, and the 10-Q quarterly reports give you interim updates. Both include the footnotes where depreciation methods, useful lives, and the detailed PP&E schedule are disclosed. Private companies have no SEC filing obligation, so you’ll typically need to request their financial statements directly.