Noncurrent Assets

Noncurrent Assets

Noncurrent assets are assets that are not used in the current period to generate revenue or current assets. They are typically long-term investments or assets that are not intended to be sold or used in the company’s operations within the current accounting period. Examples of noncurrent assets include:

• Long-term investments
• Property, plant, and equipment
• Intangible assets (such as patents or copyrights)
• Debt investments
• Deferred tax assets

Examples of Noncurrent Assets:

• A company invests $100,000 in long-term bonds.
• A company owns a factory that is used to produce widgets. The factory is a noncurrent asset.
• A company has a copyright on a software program. The copyright is a noncurrent asset.

Accounting Treatment:

Noncurrent assets are typically recorded at their current market value at the time of acquisition. They are not depreciated or amortized over their useful lives, but are instead accounted for at their historical cost or current market value at the end of each accounting period.

Examples of Accounting Entries:

• To record a purchase of long-term bonds: Debit Long-Term Investments account, Credit Accounts Payable account.
• To record depreciation of a factory: Debit Depreciation Expense account, Credit Accumulated Depreciation account.