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What are non-current tangible assets for a business?

BTEC National, BTEC Tech Award
Pearson BTEC

Last updated 13 Nov 2023

Non-current tangible assets are long-term assets with physical substance that are used in the normal course of business operations and are not expected to be converted into cash or consumed within one year. These assets provide benefits to a business over an extended period of time.

Here are some examples of non-current tangible assets:

  1. Property, Plant, and Equipment (PP&E):
    • Land: Land is a non-current tangible asset that a business owns. It includes the cost of purchasing land and any associated costs like legal fees.
    • Buildings: The cost of constructing or purchasing buildings used for business operations is considered a non-current tangible asset.
    • Machinery and Equipment: Industrial machinery, manufacturing equipment, and other tools used in the production process are examples of non-current tangible assets.
  2. Vehicles:
    • Fleet Vehicles: Businesses may own a fleet of vehicles for transportation or delivery purposes. These vehicles are considered non-current tangible assets.
  3. Furniture and Fixtures:
    • Office Furniture: Desks, chairs, cabinets, and other furniture used in office spaces are examples of non-current tangible assets.
    • Fixtures: Permanent fixtures within a building, such as lighting fixtures, may also be categorized as non-current tangible assets.
  4. Computer Hardware:
    • Servers and Data Center Equipment: Businesses may own servers and other data center equipment, which are considered non-current tangible assets.
    • Desktops and Laptops: Computers and related hardware used for business operations are included in this category.
  5. Leasehold Improvements:
    • Improvements to Leased Property: If a business makes structural improvements to a leased property, such as renovating office space, these costs are considered non-current tangible assets.
  6. Natural Resources:
    • Timberlands and Mineral Deposits: Businesses involved in industries like forestry or mining may own natural resources as non-current tangible assets.
  7. Construction in Progress (CIP):
    • Ongoing Construction Projects: Costs incurred during the construction of a long-term asset, such as a new building, are classified as non-current tangible assets until the construction is completed.

These examples represent assets that have a physical presence, are expected to provide economic benefits over multiple accounting periods, and are not easily converted into cash. Non-current tangible assets are reported on a company's balance sheet, and their value may be subject to depreciation (for assets with finite useful lives) or impairment if there is a significant decrease in their value.

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