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Non-concurrent assets are more frequently called non-current assets. They comprise a category of assets that is used in accounting. To fit into this category, an asset must not be expected to be sold within a year. There are, however, certain categories of assets commonly accepted in the accounting industry as non-current assets: long-term investment, property and intangible assets.
The definition of non-concurrent assets is negative: a non-concurrent asset is any asset that is not current. The currency of an asset refers to its convertibility into money, a quality that encompasses both the asset’s liquidity and the holder’s intent to sell it. Current assets are generally those that will be converted into cash within a year. The somewhat vague definition of the non-concurrent asset class has been clarified by practice. Three categories of assets are generally reported as non-concurrent assets.
One non-concurrent asset category is long-term investment. This includes both equity and debt instruments the company plans to hold long-term. Bonds that mature after the accounting year is finished are considered long-term assets. The category also includes stock in other companies. The lines for these assets on the balance sheet reflect their market value at the time of accounting; however, these values are prone to change, so the most recent balance sheet is not always an accurate reflection of a company’s current holdings.
Some types of property are also classified as non-concurrent assets. This category, commonly referred to as properties, plants and equipment or PP&E, consists of real estate, factories and machinery. These are assets companies usually hold for a long period or, in the case of equipment, until they need to be replaced. The purchase price of real estate is reported. The accounting of other PP&E assets takes depreciation into account, which means the accountant subtracts value for past use of the asset.
The third, and least well-defined, category of non-concurrent assets is intangible assets. These include the value of a brand name and customer loyalty. One commonly reported intangible asset is goodwill.
The line of the balance sheet that reports goodwill reconciles the cost of acquiring a company with its actual worth. When a buyer pays more for a company than it is worth on paper, accountants justify the purchase by strategically valuing intangible assets. Impairment occurs when the purchasing company revises the goodwill line so it is lower than in the previous year.