Explain the nature and accounting treatment for fixed assets?

Answer 1

Fixed assets are now more commonly known as Property, Plant & Equipment.
Property, plant and equipment are tangible items that:
(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
(b) are expected to be used during more than one period.

The a/cg treatment is the subject of IAS 16. This is a very brief summary:

Initial Measurement
They should be initially recorded at cost. [IAS 16.15] Cost includes all costs necessary to bring the asset to working condition for its intended use. This would include not only its original purchase price but also costs of site preparation, delivery and handling, installation, related professional fees for architects and engineers, and the estimated cost of dismantling and removing the asset and restoring the site (see IAS 37, Provisions, Contingent Liabilities and Contingent Assets). [IAS 16.16-17]

Measurement Subsequent to Initial Recognition
IAS 16 permits two accounting models:

Cost Model. The asset is carried at cost less accumulated depreciation and impairment. [IAS 16.30]

Revaluation Model. The asset is carried at a revalued amount, being its fair value at the date of revaluation less subsequent depreciation, provided that fair value can be measured reliably. [IAS 16.31]

Depreciation (Cost and Revaluation Models)

For all depreciable assets:

The depreciable amount (cost less prior depreciation, impairment, and residual value) should be allocated on a systematic basis over the asset's useful life [IAS 16.50].

To put it simplistically, PPE are stated at cost or revaluation less accumulated depreciation and accumulated impairment losses, if any.