Non Current Assets Definition
Non Current Assets are assets that are not expected to be converted in to cash within the next 12 months.
Non Current Assets is a term given to a companys long term investments for which their full value will not be realised within 12 months or the accounting period. The Non current Asset value can be found on a companys balance sheet, an alternative name given to Non Current Assets is Long Term Assets. Of Non Current Assets there are thre main types which are:
Non Current Assets instead of being expensed are capitalized, whereby the cost of the asset will be assigned to the number of periods it is in use. This way the entire cost of the asset is not entirely expensed in the accounting period the asset was purchased. The Non Current Asset, depending on its type will then go on to depreciate, amortize, or deplete over time. There can be added risk associated with Non Current Assets, as they typically reduce in value overtime a significant amount of reduction could result in a potential impairment. Where the difference in the fair and carrying value is written off.
Example of Non Current Assets include:
Property, Plant and Equipment
Other Long Term Assets