Assets and liabilities that are fixed in amount by contract are classified as what type of items?

Monetary items are those assets and liabilities that have a fixed amount established by contract and are usually represented in a specific currency. This means that their value remains constant regardless of changes in the economic environment or fluctuations in market conditions. Examples of monetary items include cash, accounts receivable, and accounts payable. Since their values are determined by agreements and stay constant, they cannot fluctuate with market variations.

In contrast, nonmonetary items include assets that do not have a fixed dollar amount and can fluctuate in value, such as inventory, property, plant, and equipment. Intangible items refer to non-physical assets like patents or trademarks, which also do not have a fixed contractual value. Fixed assets specifically refer to long-term tangible assets used in a company’s operations and management but do not capture the concept of being fixed by contract in the same way as monetary items do. Therefore, the classification of assets and liabilities defined by a fixed contractual value aligns with being classified as monetary items.