A non-current asset is an asset the business expects to keep and use for more than twelve months. Land, buildings, machinery, vehicles and long-term investments are typical examples. Tangible non-current assets used in operations are commonly called fixed assets.
What it means
These assets are not held to be sold in the ordinary course of trade - they are the infrastructure the business runs on. Because they are used over many years, their cost is spread across that life through depreciation (for tangible assets) or amortisation (for intangibles), rather than expensed all at once.
Where it fits in
Payroll rarely creates non-current assets, but it relates to them through fringe benefits - a company vehicle is a fixed asset whose private use by an employee gives rise to a taxable benefit. The asset stays on the balance sheet; the benefit flows through payroll.
Key rules
- Held and used for more than twelve months.
- Includes property, plant, equipment, vehicles and long-term investments.
- Cost is spread over useful life via depreciation or amortisation.
- Listed separately from current assets on the balance sheet.
