Tangible fixed assets—often called property, plant and equipment—are resources used on a continuing basis in an Irish company’s activities. The accounts normally show cost or valuation, accumulated depreciation, additions, disposals and closing net book value. Those figures help assess operating capacity and investment, but they do not prove current market value, ownership, condition or freedom from security.
Direct answer
Find tangible assets under fixed or non-current assets, then read the accounting policy and movement note. Compare opening cost, additions, disposals, depreciation, impairment and closing net book value by class. Check whether expenditure replaces worn assets or expands capacity. Confirm ownership, finance and charges separately because net book value is not a sale valuation or evidence that the asset is unencumbered.
Verify the company and accounting period
Match the legal name and CRO number, then determine whether the accounts are company-only or consolidated. A group may own property in one subsidiary and operate through another. Record the year end and comparative period, especially where a recent acquisition or disposal changed the asset base.
Look across several filings rather than one balance sheet. Our guide to merger and acquisition history can explain sudden additions, while the charge register may show lender security.
Common fixed-asset classes
| Class | Examples | Main diligence issue |
|---|---|---|
| Land and buildings | Freehold property, leasehold improvements and operational premises | Ownership, valuation, planning, condition and security |
| Plant and machinery | Production lines, specialist tools and industrial equipment | Utilisation, maintenance, useful life and resale market |
| Fixtures and fittings | Office, retail and site installations | Replacement need and value outside the premises |
| Motor vehicles | Cars, vans, trucks and specialist vehicles | Finance, mileage, condition and licensing |
| Assets under construction | Projects not yet ready for use | Completion cost, delays, approvals and impairment |
Schedule 3 defines fixed assets by intended continuing use in the company’s activities. That classification differs from inventory held for sale and from investment property held for rental or capital appreciation.
Cost, valuation and net book value
An asset may be carried using an applicable cost or revaluation basis. Net book value is the gross carrying amount less accumulated depreciation and impairment. It is an accounting amount, not a guaranteed recovery value. A fully depreciated machine can remain productive, while a recently purchased specialist asset may sell only at a large discount.
Read whether land is depreciated, whether buildings and components have separate lives, and whether revaluations were performed by a named or qualified valuer. Compare valuation dates with current conditions. Obtain a transaction-specific valuation when collateral or purchase price depends on the asset.
How depreciation works
Depreciation allocates an asset’s depreciable amount systematically over its useful economic life. Common methods include straight line and reducing balance. The annual charge depends on cost or valuation, residual value, useful life, method and the date the asset becomes available for use.
A lower depreciation charge can raise accounting profit, but it may be justified by a longer life or different asset mix. Examine policy changes and estimates. Depreciation is non-cash in the current period, yet the company may need real future cash to maintain or replace its productive assets.
Read the fixed-asset movement note
The note should help reconcile opening to closing balances through additions, disposals, transfers, revaluations, depreciation and impairment. Compare additions with investing cash outflows; differences can arise from leases, acquisitions, non-cash transactions, creditors or consolidation changes.
- Additions: ask whether they represent replacement, expansion or unfinished projects.
- Disposals: compare proceeds and gains or losses with recurring performance.
- Transfers: understand movement between construction, operational and other classes.
- Impairment: identify the operational event and whether further loss is possible.
- Revaluation: separate unrealised accounting movement from cash generation.
Capital expenditure and asset replacement
Compare annual additions with depreciation over several periods, but do not treat the ratio as a rule. A mature asset base may need substantial maintenance despite low reported additions. A new facility may require little replacement immediately. Inflation can make replacement cost much higher than historic depreciation.
Ask for maintenance expenditure, capital budgets, utilisation, downtime and safety or regulatory requirements. Weak capital spending can temporarily support cash while creating future operational risk. The cash flow statement helps distinguish operating generation from investment.
Ownership, leases and charges
Some assets are leased or financed rather than owned outright. Others may be subject to fixed or floating charges. The public balance sheet does not alone establish title or priority. Reconcile the asset register with invoices, land records, vehicle records, finance agreements and CRO charge documents.
For a business purchase, inspect whether critical assets are owned by a director or connected company and merely made available informally. A change of control or relationship breakdown could remove access. Related-party rent and shared equipment should be documented.
Worked interpretation example
Suppose a manufacturer reports plant with a gross cost of €6 million and net book value of €800,000. Depreciation is €300,000, but additions were only €60,000 in each of the last two years. Operating cash is positive and profit looks stable.
The low net book value may reflect a productive but ageing asset base. Request the maintenance record, capacity, downtime, safety inspections and a replacement plan. Model the cash and borrowing needed if a key line must be replaced. Do not assume the low carrying amount is either worthless or sufficient evidence of hidden value.
Warning signs to investigate
- Useful lives lengthen or depreciation methods change without clear explanation.
- Additions remain far below operational replacement needs.
- Large assets under construction remain unfinished for several years.
- Assets are revalued upward while cash flow and trading weaken.
- Disposal gains support profit repeatedly.
- Critical assets are owned by related parties or pledged to lenders.
- Impairment indicators exist but assumptions are unclear.
- The asset register does not reconcile to the financial statements.
Evidence to request
- A detailed fixed-asset register reconciled to the accounts.
- Ownership documents, invoices and serial or registration details.
- Lease, hire-purchase and finance agreements.
- Maintenance, inspection and certification records.
- Capital budgets and approved replacement plans.
- Independent valuations where value is material.
- Insurance and charge information.
- Post-year-end additions, disposals and impairment reviews.
Sources and editorial review
This guide was reviewed on 20 September 2026 using the fixed-asset formats, depreciation rules and movement disclosures in Schedule 3 of the Companies Act 2014, the Financial Reporting Council’s current FRS 102 materials, including Section 17, and the CRO’s financial-statement guidance. It is general information, not accounting, valuation, legal, investment or credit advice.