{"id":151,"date":"2018-04-16T20:52:50","date_gmt":"2018-04-16T20:52:50","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/?post_type=chapter&p=151"},"modified":"2024-04-26T22:18:44","modified_gmt":"2024-04-26T22:18:44","slug":"reporting-non-current-assets","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/chapter\/reporting-non-current-assets\/","title":{"raw":"Reporting Noncurrent Assets","rendered":"Reporting Noncurrent Assets"},"content":{"raw":"
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Learning Outcomes<\/h3>\r\nShow how noncurrent assets are reported on the balance sheet\r\n\r\n<\/div>\r\nA noncurrent asset is an\u00a0asset\u00a0that is not expected to be consumed within one year. Some noncurrent assets, such as land, may theoretically have unlimited\u00a0useful lives. A noncurrent asset is recorded as an asset when acquired, rather than being charged to expense.\u00a0In 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\u00a0fixed assets\u00a0may have few or no noncurrent assets.\r\n\r\nA class of noncurrent assets are intangible assets. These are assets that the business holds but do not have tangible form. Intangible assets include\u00a0goodwill, brand recognition, copyrights, patents, trademarks, trade names, and customer lists. Some businesses further\u00a0 divide intangible assets\u00a0into two categories: intellectual property and goodwill.\r\n\r\nWhether tangible or intangible, all noncurrent assets are presented on the balance sheet, and are listed after all current assets, but before\u00a0liabilities\u00a0and\u00a0equity.\r\n\r\nThe figure below illustrates how noncurrent assets are presented on a balance sheet.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Company A<\/td>\r\n<\/tr>\r\n
Balance Sheet<\/td>\r\n<\/tr>\r\n
Assets<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nNon- Current Assets<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nLong Term Investments<\/td>\r\n\u00a0$\u00a0\u00a0 1,250,000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nProperty, Plant and Equipment<\/td>\r\n\u00a0$\u00a0\u00a0 4,589,000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nAccumulated Depreciation<\/td>\r\n\u00a0$\u00a0\u00a0 1,125,000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nVehicles<\/td>\r\n\u00a0$\u00a0\u00a0\u00a0\u00a0\u00a0 985,000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nLong-term Notes Receivable<\/td>\r\n\u00a0$\u00a0\u00a0\u00a0\u00a0\u00a0 875,245<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nGoodwill<\/td>\r\n\u00a0$\u00a0\u00a0 1,100,000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nPatents<\/td>\r\n\u00a0$\u00a0\u00a0 2,895,000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\nOther Long Term Assets<\/td>\r\n\u00a0$\u00a0\u00a0 1,478,962<\/td>\r\n<\/td>\r\n<\/tr>\r\n
<\/td>\r\n<\/td>\r\n<\/td>\r\n\u00a0$ 14,298,207<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n
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practice questions<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/cfebb873-ec81-4941-af73-764e115fb7b9\r\n<\/div>","rendered":"
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Learning Outcomes<\/h3>\n

Show how noncurrent assets are reported on the balance sheet<\/p>\n<\/div>\n

A noncurrent asset is an\u00a0asset\u00a0that is not expected to be consumed within one year. Some noncurrent assets, such as land, may theoretically have unlimited\u00a0useful lives. A noncurrent asset is recorded as an asset when acquired, rather than being charged to expense.\u00a0In 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\u00a0fixed assets\u00a0may have few or no noncurrent assets.<\/p>\n

A class of noncurrent assets are intangible assets. These are assets that the business holds but do not have tangible form. Intangible assets include\u00a0goodwill, brand recognition, copyrights, patents, trademarks, trade names, and customer lists. Some businesses further\u00a0 divide intangible assets\u00a0into two categories: intellectual property and goodwill.<\/p>\n

Whether tangible or intangible, all noncurrent assets are presented on the balance sheet, and are listed after all current assets, but before\u00a0liabilities\u00a0and\u00a0equity.<\/p>\n

The figure below illustrates how noncurrent assets are presented on a balance sheet.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
Company A<\/td>\n<\/tr>\n
Balance Sheet<\/td>\n<\/tr>\n
Assets<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nNon- Current Assets<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nLong Term Investments<\/td>\n\u00a0$\u00a0\u00a0 1,250,000<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nProperty, Plant and Equipment<\/td>\n\u00a0$\u00a0\u00a0 4,589,000<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nAccumulated Depreciation<\/td>\n\u00a0$\u00a0\u00a0 1,125,000<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nVehicles<\/td>\n\u00a0$\u00a0\u00a0\u00a0\u00a0\u00a0 985,000<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nLong-term Notes Receivable<\/td>\n\u00a0$\u00a0\u00a0\u00a0\u00a0\u00a0 875,245<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nGoodwill<\/td>\n\u00a0$\u00a0\u00a0 1,100,000<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nPatents<\/td>\n\u00a0$\u00a0\u00a0 2,895,000<\/td>\n<\/td>\n<\/tr>\n
<\/td>\nOther Long Term Assets<\/td>\n\u00a0$\u00a0\u00a0 1,478,962<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n\u00a0$ 14,298,207<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
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practice questions<\/h3>\n

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