Non-Current Asset
BeginnerA non-current asset is an asset a business expects to hold and use for more than one year, such as land, buildings, equipment, long-term investments and intangible assets.
Non-current assets, also called long-term or fixed assets, support the business over many years. They are not intended to be sold as part of normal trading.
The main categories are property, plant and equipment; intangible assets, such as patents and software; goodwill from acquisitions; long-term investments, such as shares in other companies held for several years; and long-term receivables.
Most non-current assets lose value over time through use or the passing of time. Physical assets are depreciated and intangible assets with limited lives are amortised. Land and goodwill are not depreciated or amortised, but goodwill is tested for impairment.
For example, a hotel company might have non-current assets of 400 million, mostly buildings and land, compared with current assets of only 30 million. Businesses with large non-current assets are described as capital-intensive. They often need significant long-term financing, such as long-term loans or equity, to fund these assets.
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