Fixed assets (PPE)

Property, Plant, and Equipment (PPE) - the physical assets a company uses to run its business: land, buildings, machinery, vehicles, computer equipment, plant and tools. These sit on the balance sheet at historical cost minus accumulated depreciation.

How PPE moves over time

A new factory costing ₹100 cr enters PPE at ₹100 cr. Each year, depreciation reduces its book value:

Year 0:  ₹100 cr (cost)
Year 1:  ₹100 − ₹10 (depreciation) = ₹90 cr
Year 5:  ₹100 − ₹50 = ₹50 cr
Year 10: ₹100 − ₹100 = ₹0 cr (fully depreciated, still useful)

The income statement records the ₹10 cr depreciation as expense; the balance-sheet PPE shrinks by ₹10 cr; cash didn't move in this transaction.

Gross block vs Net block

• Gross block = cumulative purchase cost of all PPE, before subtracting depreciation
• Net block = gross block − accumulated depreciation = book value on balance sheet
• Gross block turnover = Revenue ÷ Gross block. Higher = more efficient asset use.