What are non-current assets?
Non-current assets are assets that are held long-term by a business. They are used in the creation of revenue.
Non-current assets (definition)
Non-current assets (also known as long-term or fixed assets) refer to assets held by a business that are expected to be long-term in nature, usually defined as having a useful life of more than 12 months. Non-current assets should also be utilised in the long-term production of revenue and profits. They are not meant to be quickly converted into cash.
Non-current assets examples
Examples of non-current assets include tangible assets and intangible assets such as:
- Property or land.
- Plant and equipment.
- Work-related vehicles.
- Long-term investments.
- Intangible assets like intellectual property.
What are current assets?
Conversely, a current asset is a tangible asset that is easily converted into cash within 12 months. In other words, current assets are highly liquid assets and are expected to have a short lifecycle.
Examples of current assets:
- Cash equivalents.
- Inventory and supplies.
- Accounts receivable.
This glossary is intended for small business owners and contains definitions suited to their needs. For more comprehensive explanations, we recommend consulting an accounting or bookkeeping professional. Reckon does not offer accounting, tax, business, or legal advice.
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