Everything your business owns should be classed an asset
The balance sheet is simply a list of these assets. Some of them will be intangible (e.g. stocks or patents), while others will be actual items like machinery or stock. Any cash or inventory that the business currently owns is referred to as being its current assets.
Fixed assets are purchases that have ongoing use over a number of years e.g. computers (including high-cost extras like printers and software) or office furniture. These are subject to a process known as depreciation which involves calculating wear and tear on the object over the years that your business has used it. Not all fixed assets are subject to depreciation – land or real estate will often increase in value year-on-year.
Depreciation is important in order to avoid the value of assets being overstated on the Balance Sheet – a piece of equipment is worth far less in its fifth year of use than when it was first purchased.