Fixed Assets
Fixed assets are noncurrent assets, such as equipment, furniture, or other expensive items that have a useful life of more than a year. The balance sheet recognizes these items as assets that depreciate over time. Usually, the balance sheet shows these assets in two lines.
The number for assets ($100,000) shows the cost of the equipment. As a company uses a fixed asset, it depreciates. The allowance for depreciation shows how much the cost depreciated and how much turns into an expense throughout the years.
In this case, the company used $30,000 of the $100,000 in equipment. The equipment depreciated that amount, and the current book value of the equipment is $70,000, which the balance sheet shows as net fixed assets.
