Non-concurrent assets, also known as non-current assets, are assets that are not expected to be sold within a year. Long-term investments, property, and intangible assets are commonly accepted categories of non-current assets. Goodwill is an example of an intangible asset that can be strategically valued to justify the cost of acquiring a business.
Non-concurrent assets are more often called non-current assets. They comprise a category of assets that is used in accounting. To fit into this category, an asset should not be expected to be sold within a year. However, there are 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 liquidity of the asset and the intention of the holder to sell it. Current assets are generally those that will be converted to cash within a year. The somewhat vague definition of the non-competitive asset class has been clarified by practice. Three categories of assets are generally reported as non-concurrent assets.
One category of non-concurrent assets is long-term investment. This includes both equity and debt instruments that the company plans to hold for the long term. Bonds that mature after the end of the accounting year are considered long-term assets. The category also includes shares 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 known as property, plant, and equipment or PP&E, consists of real estate, factories, and machinery. These are assets that companies generally keep for a long period of time or, in the case of equipment, until they need to be replaced. The purchase price of real estate is reported. PP&E’s other asset accounting takes depreciation into account, which means the accountant subtracts value from past use of the asset.
The third, and less well defined, category of non-concurrent assets is intangible assets. These include the value of a brand and customer loyalty. A commonly reported intangible asset is goodwill.
The balance sheet line reporting goodwill reconciles the cost of acquiring a business with its actual value. 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 acquiring company revises the goodwill line to be lower than the previous year.
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