Non-current assets
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What is a non-current asset?
A non-current asset, also known as non-current, is one asset that does not have the capacity to convert into money (liquidity) in a period of less than one year.
In other words, if a company needs liquidity quickly, it will not be able or it will be difficult to obtain it through the sale of a non-current asset.
This is part of the total assets that appear on the balance sheet for the year, which classifies current and non-current assets.
Characteristics of non-current assets
The main characteristics of non-current assets are the following:
- They are durable Y little fluidsas they cannot be converted into money in the short term.
- They are valuable resources or long-term investments that the company does to carry out its business. For example, the acquisition of land to build a production plant.
- They are depreciableIn other words, accounting requires reducing the value of the asset in accordance with the wear and tear it suffers over time. In this way, in the different years the amortization cost of the good that is produced by its use is assigned.
Non-current asset accounts
The non-current asset accounts are as follows:
- Long-term financial investments: includes shares, bonds or other public securities that are intended to be kept in assets for a period exceeding one year. Those who wish to sell in the short term are recorded in current assets under the account "marketable securities".
- Real estate, infrastructure and construction in progress: the company's facilities, its warehouses, plants, land, machines, equipment and constructions pending the end of the work, are part of this account.
- Intangible assets: include the company's brand, patents, copyrights, goodwill, and franchises. While they are not physical in nature, they are valuable to businesses as they can be a significant competitive advantage.
- Accumulated depreciation and amortization of goods: represents the decrease in the value of goods produced by the passage of time or wear and tear due to their use. Year after year, the value of the property will be lower given the cost of the depreciation that is accumulating.
Examples of non-current assets
The composition of the total assets of a balance sheet. Some accounts vary according to the type of activity of the company, but most are similar:
| ASSETS | Year 20xx |
|---|---|
| Current assets | |
| Cash and banks | 155,000.00 |
| Negotiable values | 16,800.00 |
| Accounts receivable | 296,700.00 |
| Stocks | 250,000.00 |
| Expenses paid in advance | 23,450.00 |
| Other current assets | 5,600.00 |
| Total current assets | 747,550.00 |
| Non-current assets | |
| Long-term financial investments | 24,500.00 |
| Real estate, infrastructure and construction in progress | 1,230,000.00 |
| Intangible assets | 345,800.00 |
| Accumulated depreciation and amortization of assets | 287,640.00 |
| Total non-current assets | 1,887,964.00 |
| Total assets | 2,635,490.00 |
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