What is a Long Term Investment?
A long term investment is part of the balance sheet, and is an investment which a business intends to hold for more than one year from the balance sheet date. A long term investment can include such things as stocks, shares, bonds, cash and property.
There is no difference in the nature of the investment between long term and a short term investments, it is simply the intention of the business which differs. For example, a business can hold a property with the intention of selling it as soon as possible providing it gets the right price, this would be regarded as a short term investment. However, if it held the same property with no intention of selling, it would be regarded as a long term investment.
For further information see the Wikipedia long term investment definition.
Learn a new bookkeeping term
Random bookkeeping terms for you to discover.
Link to this page
Click in the box and paste this long term investment definition link to your site.
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.