What is plant and equipment?
- By Book Keeping Pros
- Sources checked 15 Oct 2026
Definition
Plant and equipment means the fixed assets a business uses in running the business from day to day, such as machinery, vehicles, tools, computers, furniture and fit-out. It is a common heading in a chart of accounts and on a balance sheet, often split into separate accounts for each type of item so that their costs can be tracked.
In the books, plant and equipment is usually split into several asset accounts, such as motor vehicles, machinery, computer equipment, and furniture and fit-out, which together make up the plant and equipment figure on the balance sheet. Keeping them apart makes each item easier to find in the asset register and to check against its purchase records.
Spending on these items falls into two kinds. Buying an item is usually recorded in an asset account, while the costs of running it, such as fuel, servicing, repairs and consumables, are usually recorded as expenses. Upgrades and major overhauls sit between the two, and your accountant can say which side each one falls on.
Not every item a business uses is one it owns. Equipment can be leased, hired or bought on finance, and the agreement behind each item decides what is recorded, so the paperwork for leased and financed items belongs with the asset records.
In Australia
business.gov.au's glossary calls plant and equipment fixed assets used to operate a business, giving furniture, machinery, fit-out, vehicles, computers and tools as examples. The same glossary includes plant and equipment among its examples of personal property, the kind of property whose security interests are recorded on the Personal Property Securities Register.
Its guidance on leasing or buying equipment says a business can often choose between leasing vehicles, plant machinery or other equipment and buying them, and can have a mix of the two. It explains that leased items belong to the leasing company, while bought items are owned outright by the business.
Worked example
| Account | Items recorded | Cost (AUD) |
|---|---|---|
| Machinery | Panel saw, edge bander | 52,300.00 |
| Motor vehicles | Utility | 41,800.00 |
| Computer equipment | Design workstation, printer | 5,900.00 |
| Furniture and fit-out | Workbenches, office desks, storage | 7,450.00 |
| Tools | Hand and power tools | 6,120.00 |
| Total plant and equipment | 113,570.00 |
Illustrative example only: these rows show the method and are not sourced data.
Common mistakes
- Recording servicing and repair bills in the plant and equipment account, which overstates what the items cost.
- Keeping no asset register or other supporting detail behind a combined plant and equipment account, so individual items cannot be identified.
- Keeping no note of which items are leased or financed and which are owned outright.
Related terms
Related service
Small business bookkeeping
Your books kept current, every month.
Sources
- Key financial terms
business.gov.au, Australian Government. Current at 15 October 2026, released 9 July 2024. Checked 15 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.
- Leasing or buying vehicles and equipment
business.gov.au, Australian Government. Current at 16 October 2026, released 23 October 2024. Checked 16 October 2026.
© Commonwealth of Australia 2020, licensed under CC BY 3.0 AU. Licence: CC BY 3.0 AU.