What is the difference between gross fixed assets and net fixed assets?

Gross fixed assets and net fixed assets are two accounting terms used to describe a company's long-term tangible assets, such as buildings, machinery, and equipment. Gross fixed assets refer to the total value of a company's fixed assets before taking into account any depreciation or amortization over their useful life. It includes the original purchase price of the assets, any additions or improvements, and does not account for any depreciation related to wear and tear, obsolescence or expiration of useful life. Net fixed assets refer to the value of a company's fixed assets after adjusting for depreciation or amortization. It denotes the actual worth of the fixed assets as it includes the original cost less any accumulated depreciation or amortization expense, indicating the current market value of the asset. In summary, gross fixed assets represent the total cost of a company's long-term assets, while net fixed assets represent the actual value of those assets after adjustments for depreciation or amortization. The distinction between gross fixed assets and net fixed assets is important because depreciation can significantly alter the value of a company's assets and impact its financial position.