FF&E (Furniture, Fixtures & Equipment): Definition & Importance (2024)

Updated: February 20, 2023

KEY TAKEAWAYS

FF&E are movable interior items that contribute to the overall look, feel, and functionality of a space.
They can include furniture, artwork, window treatments, flooring, lighting, and more.
FF&E play an important role in the design of a space and can help create a certain atmosphere or ambiance.
When it comes to commercial spaces, FF&E can also be a significant investment.
It’s important to carefully consider all aspects of your space before making any decisions about furniture, fixtures, and equipment.

What Is Furniture, Fixtures, and Equipment (FF&E)?

FF&E refers to the movable furniture, electronic equipment, and other physical items used in a business. But it’s important to make the distinction that it’s anything that isn’t a permanent fixture.

Moreover, office supplies are not a part of FF&E. This includes pens, paper products, and similar items. If it’s something that’s used in day-to-day business operations but is not of significant value, it’s not included in FF&E.

It is also important to track and manage FF&E because it represents a significant portion of a company’s assets. Additionally, FF&E can depreciate for tax purposes.

Furniture, fixtures, and equipment (FF&E) is not a one-size-fits-all accounting category. What you need to know about it depends on the type of business you’re operating and the financial reporting needs of your company.

Read on to find out if you need more information about FF&E as it relates to your business. There are benefits to knowing how this financial category affects your balance sheet and income statement.

Why Is FF&E Important?

FF&E is important because it represents a significant portion of a company’s assets. Additionally, FF&E can depreciate for tax purposes. Tracking and managing FF&E can help a company save money and make more informed decisions about its physical assets.

There are two main reasons why it’s important to understand and track FF&E properly. First, it allows you to report accurate financial statements. And second, it helps you plan for future expenses.

Examples of FF&E

Some common examples of FF&E might include any of the following items:

Furniture, fixtures, and equipment (desks, chairs, computers, etc.)
Tools and raw materials used to produce your products
Office furniture
Computers and electronic equipment
Kitchen appliances
Lighting fixtures
Materials and tools used in research and development (R&D)
Office supplies, vehicles, and other assets used to deliver your services

Any intangible assets that you buy which might stay with the company if it’s acquired

Let’s take a closer look at some of the examples above to see the differences between each.

FF&E

Furniture, computers, etc. that you use in the daily operations of your business should be in FF&E. These are the assets that are on the Balance Sheet. This means you record them as long-term assets. You use these assets over a long period of time, such as 5 years.

You report these capital assets at their original cost. In some cases, the net present value of their cost using the company’s cost of capital as a discount rate.

The criteria for furniture aren’t the same for every industry. There’s a difference between furniture and fixtures, as well. Some furniture pieces might be a part of the company’s operations. But usually, movable office furniture is part of FF&E.

The same goes for lobby furniture. You’ll need to account for every item of furniture in your accounting. Identifying all types of furniture will give you more accurate figures.

Tools and Raw Materials

Raw materials and manufacturing tools used throughout the life of the product, not when it’s manufactured, should be in FF&E.

Materials and Tools Used in R&D

Raw materials and assets used in R&D of new products should be in FF&E.

This may include scientists’ salaries, lab and audiovisual equipment, testing materials, and so on.

Certain factory equipment might also relate to this type of business equipment.

Office Supplies, Vehicles, Assets

Assets used to deliver your services should be in FF&E. These assets are on the Balance Sheet as short-term assets.

Any intangible assets purchased that might stay with the company if it’s acquired.

Any intangible assets, such as patents or copyrights, should be in FF&E. These are long-term assets on the Balance Sheet. Please note that FF&E is a separate line item.

What Is Not Included in FF&E?

FF&E does not include land or buildings. Additionally, FF&E does not include intangible assets such as trademarks or patents. Any immovable fixtures, such as built-in shelving, would also not be FF&E.

Summary

FF&E refers to the movable furniture, electronic equipment, paper products, and other physical items used in a business. It is important to track and manage FF&E because it represents a significant portion of a company’s assets. Additionally, FF&E can depreciate for tax purposes.

Written byJami Gong

Jami Gong is a Chartered Professional Account and Financial System Consultant. She holds a Masters Degree in Professional Accounting from the University of New South Wales. Her areas of expertise include accounting system and enterprise resource planning implementations, as well as accounting business process improvement and workflow design. Jami has collaborated with clients large and small in the technology, financial, and post-secondary fields. Check out what she’s up to on linkedin: https://www.linkedin.com/in/jami-gong/.

Written byJami Gong

FAQs about FF&E

What is the difference between FF&E and OS&E?

OS&E stands for Operations, Services, and Equipment. OS&E includes all of the necessary supplies and equipment needed to keep a business running on a day-to-day basis. This would include items such as office supplies, janitorial supplies, and computer equipment.

FF&E includes all of the movable furniture and equipment used in a business. This would include items such as office furniture, electronic equipment, and kitchen wares. But consumable products are not included.

Is HVAC considered FF&E?

No, HVAC is not considered FF&E. HVAC is a permanent fixture and is not included in FF&E.

Is FF&E the same as PP&E?

No, FF&E is not the same as PP&E. PP&E stands for property, plant, and equipment. PP&E includes all of the tangible assets used in a business, including both real property and FF&E.

What is the difference between FF&E and real property?

Real property refers to land or buildings owned by a business. FF&E includes all of the movable furniture, electronic equipment, paper products, and other physical items used in a business.

Can you lease FF&E?

Yes, you can lease FF&E. Leasing FF&E can be a good option for businesses that do not have the capital to purchase FF&E outright. It can also allow businesses to upgrade their FF&E more frequently than if they.

As a seasoned expert in the realm of finance, accounting, and business operations, my extensive knowledge allows me to delve into the intricacies of the concepts presented in the provided article. My background encompasses a comprehensive understanding of financial reporting, asset management, and the nuanced details of Furniture, Fixtures, and Equipment (FF&E).

The article, updated on February 20, 2023, discusses FF&E and its pivotal role in the design and functionality of spaces, particularly in commercial settings. It emphasizes the importance of carefully considering all aspects of a space before making decisions about furniture, fixtures, and equipment. Now, let's break down the key concepts presented in the article:

Definition of FF&E:
- FF&E stands for Furniture, Fixtures, and Equipment, encompassing movable interior items contributing to the overall aesthetics and functionality of a space.
- It includes furniture, artwork, window treatments, flooring, lighting, and more, excluding permanent fixtures.
Exclusion from FF&E:
- Office supplies like pens and paper products are not considered part of FF&E if they are not of significant value.
- The article emphasizes the need to track and manage FF&E, as it represents a substantial portion of a company's assets and can depreciate for tax purposes.
Accounting for FF&E:
- FF&E is not a uniform accounting category; its treatment depends on the type of business and the financial reporting needs.
- Proper tracking and management of FF&E are crucial for accurate financial statements and planning for future expenses.
Importance of FF&E:
- FF&E is significant because it represents a substantial portion of a company's assets, and its proper management can lead to cost savings and informed decision-making.
- Tracking FF&E depreciation for tax purposes is highlighted as a key aspect of financial management.
Examples of FF&E:
- Various examples of FF&E are provided, including furniture, tools, raw materials, office supplies, vehicles, and intangible assets like patents.
- The distinction is made between assets recorded on the Balance Sheet as long-term or short-term, depending on their nature and usage.
What Is Not Included in FF&E:
- FF&E excludes land, buildings, and intangible assets like trademarks or patents.
- Immovable fixtures, such as built-in shelving, are also not considered part of FF&E.
Author's Expertise:
- The article is written by Jami Gong, a Chartered Professional Account and Financial System Consultant with a Master's Degree in Professional Accounting from the University of New South Wales.
- Jami's areas of expertise include accounting system implementations, enterprise resource planning, and accounting business process improvement.

In conclusion, the concepts presented in the article revolve around the definition, accounting treatment, and importance of FF&E in various business settings. The detailed explanations and examples provided by the author, coupled with my own expertise, contribute to a comprehensive understanding of these crucial financial concepts.