Definition: Furniture, fixtures, and equipment (FF&E) are tangible assets used by a business to carry out its the core operations and generate profits.
What Does FF&E Mean?
What is the definition of FF&E?FFE are assets that depreciate over their useful life, usually three years or more, and include office furniture, fixtures, and equipment, such as machinery, computers, tables, and any other asset that is not related to the building structure. When valuing a firm, analysts take into account the costs related to FF&E because these assets depreciate over the long-term.
However, these items need to be essential to the business’ core operations. For example, chairs are important because employees need to sit on a chair to perform their tasks. Desks account in the same way, and so on.
Let’s look at an example.
Mark is the accountant of a telephone company. He is asked to prepare a list with all the furniture, fixtures, and equipment assets and calculate their cost to the company.
Mark goes from department to department and writes down the FF&E assets. Then, he compiles the following list:
The total cost of these assets is estimated at $150,000. The assets are depreciated using the straight-line method, typically for a period of 10 years, and are all classified as long-term assets on the company’s balance sheet.
Define FF&E: Furniture, fixtures, and equipment are fixed assets used by the company to generate revenues.