diff --git a/erpnext/stock/doctype/item/item.json b/erpnext/stock/doctype/item/item.json
index 680e7ccb3b..e7ac68aabb 100644
--- a/erpnext/stock/doctype/item/item.json
+++ b/erpnext/stock/doctype/item/item.json
@@ -430,6 +430,58 @@
    "set_only_once": 0, 
    "unique": 0
   }, 
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "fieldname": "is_fixed_asset", 
+   "fieldtype": "Check", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 0, 
+   "label": "Is Fixed Asset", 
+   "length": 0, 
+   "no_copy": 0, 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
+  {
+   "allow_on_submit": 0, 
+   "bold": 0, 
+   "collapsible": 0, 
+   "depends_on": "is_fixed_asset", 
+   "fieldname": "asset_category", 
+   "fieldtype": "Link", 
+   "hidden": 0, 
+   "ignore_user_permissions": 0, 
+   "ignore_xss_filter": 0, 
+   "in_filter": 0, 
+   "in_list_view": 0, 
+   "label": "Asset Category", 
+   "length": 0, 
+   "no_copy": 0, 
+   "options": "Asset Category", 
+   "permlevel": 0, 
+   "precision": "", 
+   "print_hide": 0, 
+   "print_hide_if_no_value": 0, 
+   "read_only": 0, 
+   "report_hide": 0, 
+   "reqd": 0, 
+   "search_index": 0, 
+   "set_only_once": 0, 
+   "unique": 0
+  }, 
   {
    "allow_on_submit": 0, 
    "bold": 0, 
@@ -2307,7 +2359,7 @@
  "issingle": 0, 
  "istable": 0, 
  "max_attachments": 1, 
- "modified": "2016-07-06 16:00:45.561339", 
+ "modified": "2016-07-06 16:00:45.561349", 
  "modified_by": "Administrator", 
  "module": "Stock", 
  "name": "Item", 
diff --git a/erpnext/stock/doctype/item/item.py b/erpnext/stock/doctype/item/item.py
index eee88bc517..99d7e3f193 100644
--- a/erpnext/stock/doctype/item/item.py
+++ b/erpnext/stock/doctype/item/item.py
@@ -86,6 +86,7 @@ class Item(WebsiteGenerator):
 		self.validate_variant_attributes()
 		self.validate_website_image()
 		self.make_thumbnail()
+		self.validate_fixed_asset()
 
 		if not self.get("__islocal"):
 			self.old_item_group = frappe.db.get_value(self.doctype, self.name, "item_group")
@@ -220,6 +221,14 @@ class Item(WebsiteGenerator):
 					file_doc.make_thumbnail()
 
 				self.thumbnail = file_doc.thumbnail_url
+				
+	def validate_fixed_asset(self):
+		if self.is_fixed_asset:
+			if self.is_stock_item:
+				frappe.throw(_("Fixed Asset Item must be a non-stock item."))
+				
+			if not self.asset_category:
+				frappe.throw(_("Asset Category is mandatory for Fixed Asset item"))
 
 	def get_context(self, context):
 		context.show_search=True