What are Furniture and Fixtures in Accounting?

Furniture and Fixtures Definition

In accounting, furniture and fixtures refer to long-term assets that are used to furnish an office, store, or other types of business property.

 

Furniture includes items that provide comfort and functionality to an office or business property.

 

These items can be physically moved around an office or business premises.

 

Fixtures are items that are physically attached to a building but can usually be removed without causing significant damage to the property.

 

These assets are a part of the tangible fixed assets category on a company’s balance sheet, in other words, they can be physically touched.

 

These assets usually have a useful life of between five and ten years.

Furniture and Fixtures Examples

Let’s now look at some real life examples of furniture and fixtures.

 

Examples of furniture include:

 

  • Desks
  • Chairs
  • Filing cabinets
  • Conference tables
  • Sofas and reception area seating
  • Shelving units

 

Examples of fixtures include:

 

  • Ceiling and wall lighting
  • Ceiling fans and air conditioning
  • Built-in shelving and cabinets
  • Plumbing
  • Signage (if fixed to the building)
  • Window treatments (e.g., blinds and curtains)
What are Furniture and Fixtures in Accounting?

Accounting for Furniture and Fixtures

Furniture and fixtures are listed under non-current assets or property, plant, and equipment (PP&E).

 

These items are shown in the long term assets section of the balance sheet.

Initial Purchase and Recording

Furniture and fixtures are recorded in the accounts at their purchase price, including any costs to bring them to their intended use (for example, delivery and installation costs).

Furniture and Fixtures Account

Balance Sheet

Debit

Cash/Accounts Payable

Balance Sheet

Credit

Depreciation

As furniture and fixtures are long-term assets, their costs are spread over their useful lives through depreciation.

 

Depreciation methods can vary, for example, straight-line or declining balance, but the goal is to allocate the cost of the asset over its useful life.

 

The useful life of furniture and fixtures is often estimated based on the company’s policies, industry standards, and the nature of the items. It typically ranges from 5 to 10 years.

Maintenance and Repairs

Routine maintenance and repair costs are expensed through the income statement as they are incurred.

 

Any significant improvements or replacements that can extend the asset’s useful life are capitalised on the balance sheet.