Fixed or tangible assets are the physical structures that support the University and are therefore of significant value and are required to be accurately recorded and reported on within the University's financial statements.
The University has a legal requirement to record its fixed assets and write them off over their useful life. These rules are governed by accounting standards and are embraced by the HE Sector.
Deficit/Surplus, Balance Sheet Value
Whether the assets of the University are correctly identified and capitalised can directly affect the financial position of the University.
For example, if purchased equipment is not capitalised then its full cost is immediately processed in the year. If it had been identified and accounted for as a fixed asset then the cost would be moved to the balance sheet and depreciated over 4 years - matching the cost of the asset more accurately to its useful life in the University.