What are Long Term Assets?
Long term assets sometimes referred to as fixed assets, are the assets of a business which are expected to last and be of value for a number of years. Examples of long term assets include items such as property, land, plant and machinery, motor vehicles and computer equipment.
Long term assets are for use within the business and are not held for resale.
The cost of long term assets will be written off over the useful life of the asset in order to match it to the benefit derived from it.
For example if a machine costs 10,000 and lasts for 5 years, the amount of 10,000 / 5 = 2,000 will be treated as a depreciation expense of the business each year for the next 5 years.
For further information see the Wikipedia long term assets definition.
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About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.