Assets classified as property, plant, and equipment must be both long-term in nature and possess physical substance.

Question

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Property, plant, and equipment (PPE) are tangible assets that are expected to be used in operations for a long period of time, typically more than one year. These assets must also have physical substance, meaning they can be touched or felt. Examples of PPE include land, buildings, machinery, and vehicles.

Assets Classified as Property, Plant, and Equipment Must Be Both