What is a non-current asset?

What are Assets?

A thing, person or a quality which is useful or beneficial is termed as an asset, giving this definition a financial turn assets are things tangible or non-tangible that hold economic value and are held by businesses to extract future benefits. The value of asset is adjudged by the amount it can fetch in monetary terms & that is further used in the assets column of a company’s balance sheet.

Examples of assets are Cash, machinery, stock, building, vehicles, receivables, copyrights, patent, logos, patents. Assets can be classified as Current, Fixed, Tangible, Non-tangible etc.

*Current Assets

1.These are assets which are held by a business for a short period, mainly a year, or within an one accounting cycle of a business. 

2.Current Assets are a balance sheet account that can either be converted to cash or used to pay current liabilities within the above mentioned time frame.

3.These are typically seen as those assets which can be easily converted to cash to pay off current liabilities and outstanding debt payments.

4.current asset is shown on the balance sheet/financial statement.

*Examples of current assets include 

1.Cash/Bank, 

2.Inventory/stocks

3.Prepaid Expenses/prepayment

4.Receivables/Debtors, 

They are shown on the Assets side of the balance sheet. Current Assets are also called circulating assets, circulating capital or floating assets.

Non-current Asset?

1. A non-current asset is an asset that is not likely to turn to unrestricted cash within one year of the balance sheet date. (This assumes that the company has an operating cycle of less than one year.)

2.A non-current asset is also referred to as a long term asset

3.A non-current asset is asset that business uses more than one accounting year/period.

4.A non-current asset is shown on the balance sheet/financial statement.

*Examples of Non-current assets include 

1.property, planet and equipment

2.lands & building

3.furniture