Page 107 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

Non-current assets: Acquisition and depreciation

Non-current assets – tangible and

intangible

Non-current assets are distinguished from current assets because they:

 are a resource acquired by an organisation with the intention of using it to earn
revenue for more than one accounting period

 are not normally acquired for resale

 could be tangible or intangible

 used to generate income directly or indirectly for a business entity

 are not normally liquid assets (i.e. not easily and quickly converted into cash
without a significant loss in value).

Examples of intangible non-current assets include goodwill,
development costs, licences and patents.

Examples of tangible non-current assets include land, buildings,
motor vehicles, machinery and equipment.

101