What type of asset is furniture considered?

Furniture is classified as Property, Plant, and Equipment (PPE) in accounting. This classification is appropriate because PPE comprises tangible assets that are used in the operations of a business and have a useful life extending beyond one year. Furniture is a physical item that a company uses to facilitate its operations, such as desks, chairs, and cabinets, which are necessary for the work environment.

In the context of asset categorization, tangible assets like furniture represent a significant investment for organizations and are recorded at their purchase price, minus depreciation over time. This contrasts with intangible assets, which lack physical substance and include things like patents or trademarks. Current assets are those that are expected to be converted into cash or consumed within a year, such as inventory or accounts receivable. Current liabilities, on the other hand, refer to obligations the organization expects to settle within a year, such as accounts payable or short-term loans. Recognizing furniture as PPE aligns with its role in supporting business operations and its lasting value over multiple reporting periods.