Property, Plant, and Equipment are defined as:

The definition of Property, Plant, and Equipment (PP&E) emphasizes that these are long-term assets that are essential for a company’s operational purposes. PP&E includes tangible physical assets that are expected to provide utility over several years in the course of business operations.

Choosing assets with long useful lives is key, as these assets are not intended for quick resale or immediate consumption; rather, they serve functional roles in generating revenue over an extended period. For example, machinery, buildings, and vehicles fall under this category due to their durability and importance in production activities.

While it might seem that long-term assets currently used in operating activities also touch on valid characteristics of PP&E, the correct identification that they have long useful lives used in business operations captures both their ongoing active role and their extended nature effectively. This highlights the distinction of PP&E from other asset types, such as current assets or intangible assets, which do not possess physical substance. This understanding is crucial in accounting as it impacts the way these assets are recorded, depreciated, and valued on financial statements.