what are noncurrent assets 
noncurrent assets are a company s long term investments for which the full value will not be realized within the accounting year they are typically highly illiquid meaning these assets cannot easily be converted into cash examples of noncurrent assets include investments intellectual property real estate and equipment noncurrent assets appear on a company s balance sheet investopedia ellen lindnerunderstanding noncurrent assetsa company s assets are divided into two categories noncurrent and current assets which appear on a company s balance sheet noncurrent assets also referred to as long term assets are capitalized rather than expensed this means that the company allocates the cost of the asset over the number of years for which the asset will be in use instead of allocating the entire cost to the accounting year in which the asset was purchased depending on the type of asset it may be depreciated amortized or depleted 1the assets section of the balance sheet is segmented according to the type of asset the leading section is current assets which are short term assets that can be converted into cash within one year or one operating cycle current assets include items such as cash accounts receivable and inventory noncurrent assets are always classified on the balance sheet under one of the following headings 1property plant and equipment which may also be called fixed assets encompass land buildings and machinery including vehicles 1investments are classified as noncurrent only if they are not expected to turn into unrestricted cash within the next 12 months of the balance sheet date noncurrent assets fall under three major categories tangible assets intangible assets and natural resources noncurrent assets whether tangible non tangible or natural resources will benefit the company for more than one year they differ from current assets which can be conveniently sold used or exhausted through standard business operations within a year such as inventory and accounts receivable 1examples of noncurrent assetsexamples of noncurrent assets include fixed assets like property and equipment long term investments such as bonds or real estate or investments made in other companies are also common noncurrent assets trademarks client lists and the goodwill acquired in a merger or acquisition are all considered intangible long term assets 1it is not uncommon for capital intensive industries to have a large portion of their asset base composed of noncurrent assets an example of such a company is an oil refinery conversely service businesses may require minimal to no use of fixed assets while a high proportion of noncurrent assets to current assets may indicate poor liquidity this may also simply be a function of the respective company s industry 1other noncurrent assets include the cash surrender value of life insurance a bond sinking fund established for the future repayment of debt is classified as a noncurrent asset some deferred income taxes and unamortized bond issue costs are noncurrent assets as well 1prepaid assets may be classified as noncurrent assets if the future benefit is not to be received within one year for example if rent is prepaid for the next 24 months 12 months is considered a current asset as the benefit will be used within the year the other 12 months are considered noncurrent as the benefit will not be received until the following year 2