Property, Plant & Equipment (PP&E)
Long-term tangible assets used in business operations, recorded on the balance sheet at cost less accumulated depreciation.
What is PP&E?
Property, plant, and equipment (PP&E) is the category of long-term tangible assets a company uses to produce goods or deliver services, reported as a non-current asset on the balance sheet. It includes land, buildings, machinery, manufacturing equipment, vehicles, computers, and leasehold improvements. PP&E is recorded at historical cost — including purchase price, installation, and all costs to bring the asset to its intended use — and then reduced by accumulated depreciation over its useful life (except land, which is not depreciated). Capital expenditures (capex) increase the gross PP&E balance, while asset disposals and depreciation reduce it. Net PP&E is a key driver of asset-heavy industries such as manufacturing, utilities, and transportation.
Example
Ford Motor Company reported gross PP&E of approximately $85 billion and accumulated depreciation of $55 billion as of year-end 2023, resulting in net PP&E of $30 billion. This represents its factories, tooling, equipment, and land. Ford's annual capital expenditure of roughly $8 billion adds new PP&E, while depreciation of $4 billion per year reduces the net balance. Asset-heavy manufacturers like Ford typically have net PP&E representing 30–50% of total assets.