What Is FF&E, and What Role Does it Play in Commercial Construction Projects?

Examples of FF&E

While it would be impractical to include every item that may be deemed fixed assets and equipment on a company’s balance sheet (there are a plethora of items that could be included), the following are some of the most prevalent types of assets and equipment:

• Furniture & Millwork: Tables, chairs, lamps, bookshelves, couches, and other furniture
• Electronic & AV: Computers, audio equipment, point-of-sale (POS) terminals, speakers, and other electronic devices are all examples of what is considered “high-tech.” Security systems are frequently included in the definition of FF&E.
• Items for decoration: Art, photographs, or other objects on the walls.
• Lights & Illumination: Lamps and lighting fixtures are a type of FF&E  (even if they are technically attached to the building).
• Other non-product-for-sale business equipment: Gym equipment such as weights and cardio machines, for example, might be available in a fitness facility. An item such as a currency counter, for example, might be deemed fixed fixed assets in a lending organisation. Rotating garment racks are a form of asset that is likely to be included in the fixed and mobile equipment (FF&E) of a dry cleaning firm.

As a general rule, physical assets that are considered in FF&E calculations are those that are:

1. Are simple to take down from the structure.
2. It should have usable life of at least one year.
3. Aren’t products that a business would typically sell.

In the next section, we’ll look at a few instances of items that aren’t often included in FF&E, although the vast majority of items that qualify fit these three fundamental characteristics.

What is not included in FF&E?

It’s just as important to know what items are not included in FF&E calculations. Just to name a few common asset types that aren’t considered FF&E:

• Immovable building components: Any fixed item that, if removed, would jeopardize the building’s operation is normally not included in FF&E. Toilets, faucets, and HVAC equipment, to mention a few examples, are often not included in FF&E and are regarded to be part of the business itself. This category also includes doors and windows.
• Office supplies: An asset must have a projected lifespan of one year or more to be included in FF&E. So, even though you would consider paper, pens, markers, and other office supplies to be business “equipment,” they aren’t considered FF&E.
• Consumables: FF&E does not contain any food, drink, or paper items.
• Built-in furniture: If a building incorporates built-in desks, bookshelves, or other non-removable furniture into its design, it is not considered FF&E.
• Intangible assets: This should go without saying, but an asset must be a tangible piece of equipment in order to be termed FF&E.

It is also vital to note that FF&E is not the same as inventory. Assume you were looking to purchase an established restaurant business. The tables, chairs, POS terminals, and furnishings in the back office would be considered FF&E assets for the company. Any products that the business would normally sell (for example, the bottles of whiskey in the bar’s stockroom) would not be recognized as FF&E and would instead be accounted for separately as part of the firm’s current inventory.