Fixed assets (pamatlīdzekļi)
In Latvian: Pamatlīdzekļi
Fixed assets (pamatlīdzekļi) are movable or immovable tangible items that an undertaking holds for production, services, rental or administration, expects to use for more than a year and has not bought for resale.
The law sets four criteria: the item is held by the owner or a finance lessee, is expected to be used for more than a year and bring economic benefits, is not bought or held for sale, and has a useful life longer than one normal operating cycle.
On the balance sheet they sit among long-term investments, for example land, buildings and structures, equipment and machinery, and other fixtures and fittings. They are measured at cost less accumulated depreciation.
Purpose decides, not the item: a computer bought for resale is stock, while the same computer used in the office is a fixed asset.
Example
SIA "Ozols" buys a woodworking machine for EUR 18,000 excluding VAT to use for six years. It records the machine among fixed assets under equipment and machinery and depreciates it every year.
Legal basis
- Law on Annual Statements and Consolidated Annual Statements, Section 1, Clause 17 likumi.lv
- Law on Annual Statements and Consolidated Annual Statements, Section 16 likumi.lv
- Law on Annual Statements and Consolidated Annual Statements, Section 23 likumi.lv
This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.