Non-current assets refer to assets that have a service life of more than one year or cannot be converted into cash within one year in the production and operation activities of an enterprise. Non-current assets are long-term investments of enterprises, usually used to purchase fixed assets, intangible assets, long-term equity investments, etc. The value of an illiquid asset is reflected in its contribution to the future earnings of the business, rather than its current market value. The main classifications of non-current assets are as follows:
Fixed assets refer to tangible assets held by enterprises for the purpose of producing products, providing labor services, leasing or operation and management, with a service life of more than one year and a unit value of a certain standard. Fixed assets include:
Buildings: refers to buildings, factories, warehouses, office buildings and other buildings used by enterprises for production, operation or rental.
Machinery and equipment: refers to the machinery, instruments, meters, tools and other equipment used by enterprises for production and processing, transportation, testing, maintenance, etc.
Means of transportation: refers to the means of transportation such as automobiles, trains, ships, and airplanes used by enterprises to transport goods or personnel.
Electronic equipment: refers to electronic computers, communication equipment, automation equipment and other electronic equipment used by enterprises for calculation, communication, control, measurement, etc.
Other equipment: refers to other equipment used by the enterprise for production and operation, such as furniture, utensils, books, archives, etc.
Intangible assets refer to assets that do not have a physical form, but can bring economic benefits to the enterprise. Intangible assets include:
Goodwill: refers to the part of the net asset value paid by the enterprise when acquiring other enterprises, which reflects the value of intangible factors such as the reputation of the enterprise, brand, and customer relationships.
Patent right: refers to the exclusive right to use its invention and creation authorized by the state, which is usually valid for 20 years.
Trademark right: refers to a special sign owned by an enterprise registered by the state to distinguish its products or services, which is usually valid for 10 years and can be renewed.
Copyright: refers to the exclusive rights owned by enterprises that are protected by law and enjoy the literary, artistic, scientific and other works created by them, which are usually valid for the life of the author plus 50 years.
Other intangible assets: refers to other intangible assets owned by the enterprise, such as land use rights, non-patented technologies, franchise rights, etc.
Long-term equity investment refers to the equity investment held by the enterprise and is expected to bring investment income for more than one year. Long-term equity investments include:
Investment in subsidiaries: refers to the investment of an enterprise in other enterprises under its control, usually accounting for more than 50% of the equity of the invested enterprise.
Investment in an associate: refers to an investment in other enterprises under its common control, usually accounting for 20% to 50% of the equity of the invested enterprise.
Investment in other enterprises: refers to the investment of other enterprises that the enterprise does not control or jointly control, usually accounting for less than 10% of the equity of the invested enterprise.
Other non-current assets are those other than those mentioned above that have a useful life of more than one year or cannot be converted into cash within one year. Other non-current assets include:
Long-term receivables: refers to the receivables that are expected to be recovered by the enterprise in more than one year due to the provision of goods, provision of services, transfer of assets, etc.
Long-term bond investment: refers to the bond investment held by the enterprise and is expected to mature or be realized in more than one year.
Investment real estate: refers to real estate held by enterprises for rental or value-added, such as commercial buildings, office buildings, hotels, etc.
Disposal of fixed assets: refers to the fixed assets that have been discontinued but not yet disposed of, such as scrapped, idle, or for sale.
Non-current assets are important assets of an enterprise, reflecting the long-term investment and development potential of the enterprise. The classification of non-current assets helps enterprises to rationally account for and manage them, and improve their use efficiency and value. There are four main types of non-current assets, namely fixed assets, intangible assets, long-term equity investments and other non-current assets, each of which can be subdivided into several types. The classification criteria for non-current assets are mainly determined based on factors such as their useful life, whether they have a physical form, and the nature of the investment. The classification of non-current assets is the basic knowledge of enterprise financial accounting, and it is also an important part of enterprise operation and management.