Property, Plant, and Equipment (PP&E)

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Definition of 'Property, Plant, and Equipment (PP&E)'

Property, plant, and equipment (PP&E) are long-term assets that are used in the production or supply of goods or services, or for administrative purposes. PP&E includes land, buildings, machinery, equipment, vehicles, and other tangible assets. PP&E is not intended for sale in the ordinary course of business.

PP&E is an important part of a company's balance sheet. It represents the value of the company's fixed assets, which are used to generate revenue. PP&E is also used to calculate a company's depreciation expense, which is the annual cost of using the assets.

The value of PP&E can change over time due to factors such as inflation, depreciation, and obsolescence. It is important for companies to keep their PP&E up-to-date in order to maintain their competitive advantage.

PP&E is a significant asset for many companies. It is important to understand the different types of PP&E and how they are accounted for in order to make informed financial decisions.

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