Reporting Noncurrent Assets

Learning Outcomes

Show how noncurrent assets are reported on the balance sheet

A noncurrent asset is an asset that is not expected to be consumed within one year. Some noncurrent assets, such as land, may theoretically have unlimited useful lives. A noncurrent asset is recorded as an asset when acquired, rather than being charged to expense. In a capital-intensive industry, such as automobile manufacturing, a large part of the assets of the business may be noncurrent assets. On the other hand, a service business like an accounting firm that requires a minimal amount of fixed assets may have few or no noncurrent assets.

A class of noncurrent assets are intangible assets. These are assets that the business holds but do not have tangible form. Intangible assets include goodwill, brand recognition, copyrights, patents, trademarks, trade names, and customer lists. Some businesses further  divide intangible assets into two categories: intellectual property and goodwill.

Whether tangible or intangible, all noncurrent assets are presented on the balance sheet, and are listed after all current assets, but before liabilities and equity.

The figure below illustrates how noncurrent assets are presented on a balance sheet.

Company A
Balance Sheet
Non- Current Assets
Long Term Investments  $   1,250,000
Property, Plant and Equipment  $   4,589,000
Accumulated Depreciation  $   1,125,000
Vehicles  $      985,000
Long-term Notes Receivable  $      875,245
Goodwill  $   1,100,000
Patents  $   2,895,000
Other Long Term Assets  $   1,478,962
 $ 14,298,207

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