Fixed assets of an enterprise: types and valuation

The purchase of property, machinery or a company car will also be reflected in your financial statements. How to value and account for the assets correctly so that everything stands up to scrutiny from the tax office? Just keep a few principles in mind.

What is a fixed asset?

Several regulations govern fixed assets from an accounting and tax perspective. These are primarily the Accounting Act (AoA) with its related decree and the Income Tax Act (ITA).

According to them, fixed assets are generally considered to be such assets of a company whose expected useful life is longer than 1 year and whose purchase price exceeds a certain limit.

Fixed assets are divided into 3 categories:

Property, plant and equipment (PP&E)

From a tax perspective, most real estate and separate movable assets (e.g. machinery and cars) with a value of more than CZK 80 000 (if they have operational and technical functions for more than 1 year) are considered fixed assets. Furthermore, this group includes their technical improvements (e.g. reconstructions or extensions), adult animals and their groups with a value exceeding CZK 80,000 and several other types of property listed in §26 of the ITA.

From the point of view of corporate accounting, this group generally includes assets with a useful life of more than 1 year - the minimum value for inclusion of assets in this category is determined by the company itself on the basis of internal regulations.

Tangible fixed assets are further divided into 2 types:

1) Depreciated

These are assets that wear out over time and lose their value. These are typically buildings, vehicles, livestock or fruit trees. Their wear and tear is accounted for by depreciation.

Depreciation both reduces the book value of the asset and, under certain conditions, can be claimed as a tax deductible expense.

Tip! Read the details on depreciation of fixed assets.

2) Not depreciated

These are assets that in turn appreciate in value over time. This includes land, artwork and collections. These assets are not depreciated.

Tangible fixed assets are most often accounted for in accounting groups 02 (depreciated tangible fixed assets) and 03 (non-depreciated tangible fixed assets). They then appear in the balance sheet as assets, just like other types of fixed assets.

Good to know:

In addition to these categories, in practice we also see so-called small tangible fixed assets. This has a useful life of more than 1 year but a value of less than the statutory CZK 80 000.

From a tax point of view, it is accounted for as a one-off tax expense (until consumption) or it is depreciated and accounting depreciation is used as a tax expense.

Intangible fixed assets (DNM)

Intangible fixed assets is a slightly more abstract concept. These are things that are intangible in nature but have a book value.

These include software, research and development results (such as patents), valuation rights or brand goodwill, i.e. the difference between the market value of a business and the value of its assets.

Caution! Intangible fixed assets with a classification date from 1 January 2021 onwards are not depreciated for tax purposes. However, it can be depreciated by accounting depreciation, which will reduce the tax base as expenses (costs) incurred to achieve, secure and maintain taxable income (§24 ZDP letter v), paragraph 2).

Accounting for DNM is carried out in account group 01.

Fixed financial assets (DFM)

Long-term financial assets include mainly securities, shares in other companies, loans and the like (all with a maturity of more than 1 year).

DFM is not used for operating activities, but it provides the enterprise with various revenues or influence in other companies. DFM is accounted for in account group 06.

Type of fixed asset Classification criterion (useful life/value) Example Depreciation Accounting group
tangible depreciable >1 year / over 80 000 CZK buildings, machines, vehicles yes, accounting and tax depreciation 02
tangible not depreciated >1 year / over CZK 80 000 land, works of art not depreciated 03
small tangible >1 year / under CZK 80 000 laptops,
small assets
is depreciated if it is not included in consumption according to the company's internal regulations (groups for DHM or inventories)
intangible >1 year software, licences mostly yes, only accounting amortisation 01
financial >1 year securities not depreciated 06

Valuation of fixed assets

The correct valuation of assets in the company's accounts is also important. This is because it must, by law, faithfully reflect the current condition and value of the company's assets. Fixed assets are valued in one of 4 ways:


This is the price at which you purchased the asset. This is the cost of acquisition + incidental acquisition costs (e.g. shipping, assembly, duty).

On the other hand,you do not include exchange rate differences or repair costs.

Did you know that: technical appreciation of the asset increases the valuation value of the asset?

Reproduction cost

This is the price at which the asset would have been acquired at the time it is accounted for. It is determined by professional appraisal. Reproduction cost is used to value donations or assets for which the original cost cannot be determined.

Own cost

Have you manufactured the asset directly in your business? Then its book value takes into account all direct (e.g. materials, workers' wages) and indirect (e.g. energy, production hall rent) costs of its production.

Nominal value

You usually value financial assets, typically securities, at their nominal value. However, as their value often fluctuates, some securities must be revalued to fair (market) value at the balance sheet date in accordance with Section 27 of the Accounting Act.

Accounting on the left

Do you need a reliable partner to manage your company's accounting? Contact our accounting team. We will create your financial statements, calculate depreciation and prepare your taxes - all in a clear and professional manner. Just contact us using the form below.

Contact information

Write to us and we’ll get back
to you within 24 hours.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.


Tax & Accounting Service
Tax & Accounting Service

Do away with the administration, don't pay more than…

Do away with the administration, don't pay more than is needed, and focus 100% on your business. Our capable team will…

Learn more Learn more

News from our blog