Long lived assets are used in normal operations to generate revenue. Used (or held) until service potential exhausted. Property, plant and equipment (pp&e) tangible operating assets. Tangible assets (e. g. land, buildings, equipment, land improv. ) Legal and contractual rights without physical substance (e. g. patents, copyrights, trademarks, licenses, goodwill, franchises) Historical cost principle requires recording fixed assets at the exchange price at the time the asset is purchased. Cash paid in exchange for an asset. Can also be purchased by issuing debt. In this situation, the asset is valued at the fair value of the liability on the date the asset is acquired. Non-cash consideration, such as land or other non cash assets, may be given in exchange for an asset. The purchase price of the acquired asset is the fair value of the asset given up or the fair value of the asset received, whichever is more clearly determinable.