Saturday, April 14, 2012

What is a Non-current Asset?

What is a Non-Current Asset? 

A Non-Current is considered an asset whose complete value will not be realized during one accounting year. Non-Current assets are capitalized rather than expensed by a firm.  This capitalization means that the company allocates the cost of the asset over the number of years for which the asset will be  used, instead of allocating the entire cost to the accounting year in which the asset was purchased by the company.

Examples of Non-current assets that are commonly held by companies include stock investments, intangible assets such as goodwill, patents, and property, plant and equipment. Non-Current assets will always appear on the company's balance sheet and must be kept updated by an accountant.

By contrast, examples of current assets include inventory, accounts receivables, and case. 

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