What Is Plant, Property & Equipment?

Hassan Saab

Reviewed by

Hassan Saab WSO Editorial Board

Expertise: Investment Banking

Plant, Property and Equipment (PP&E) are assets owned by a firm which are tangible, long term and illiquid. PP&E is fairly self explanatory and contains assets such as:

  • Buildings - Factories, offices, warehouses etc
  • Machinery - Construction equipment, mass production
  • Transportation - Company cars, truck fleets, aircraft, shipping containers

PP&E is listed on the Balance Sheet under Long-Term Assets. PP&E tends to be worth zero (or at least a lot less) after a given period of time so to account for this, PP&E is assumed to depreciate at a given rate over the lifetime of the asset and this is shown on the Income Statement and Cash Flow Statement as Depreciation.

On the Income Statement, Depreciation on PP&E is listed as a loss but on the Cash Flow Statement this must be added back in as it is not actually a physical loss in cash, merely a way of accounting for lifetime loss in value.

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Hassan Saab

Hassan Saab is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. Prior to becoming a Founder for Curiocity, Hassan worked for Houlihan Lokey as an Investment Banking Analyst focusing on sellside and buyside M&A, restructurings, financings and strategic advisory engagements across industry groups. He holds a BS from the University of Pennsylvania in Economics. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.