{"id":5302,"date":"2021-10-20T17:50:53","date_gmt":"2021-10-20T16:50:53","guid":{"rendered":"https:\/\/www.simtrade.fr\/blog_simtrade\/?p=5302"},"modified":"2021-10-20T17:50:53","modified_gmt":"2021-10-20T16:50:53","slug":"long-term-assets","status":"publish","type":"post","link":"https:\/\/www.simtrade.fr\/blog_simtrade\/long-term-assets\/","title":{"rendered":"Long-Term Assets"},"content":{"rendered":"

Long-Term\u00a0Assets<\/h1>\n

\"Shruti<\/a><\/p>\n

In this article,\u00a0Shruti CHAND<\/a>\u00a0(ESSEC Business School, Grande Ecole<\/i> Program – Master in Management, 2020-2022) elaborates on long-term assets.<\/p>\n

This read will help you get started with understanding\u00a0long-term assets\u00a0on the balance sheet of a business.<\/p>\n

Introduction<\/h2>\n

Long-term assets on a balance sheet represent all the assets of a business that are not expected to turn into cash within one year. They are represented as the non- the current part of the balance sheet. These are a set of assets that the company keeps for the long-term and is not likely to be sold in the coming years, in some cases, may
\nnever be sold.<\/p>\n

Long-term assets can be expensive and require huge capital which might result in draining cash reserves or increasing debt for the firm.<\/p>\n

The following category of long-term assets can be found in the balance sheet:<\/p>\n

1. Investments:<\/p>\n

These are all the long-term investments by a company in securities, real estate, and other asset classes. Even the bonds and other assets restricted for long-term value are treated as investments by the company.<\/p>\n

2. Property, plant, and equipment:<\/p>\n

Property that the company owns associated with the manufacturing process or other business operations. An important aspect about this asset class is the depreciation associated with the value of the asset over time.<\/p>\n

Typically, you can find the following items disclosed as property, plant and equipment on the balance sheet:<\/p>\n

\u25cf Land
\n\u25cf Land improvements
\n\u25cf Buildings
\n\u25cf Furniture
\n\u25cf Machinery
\n(Less: Depreciation)<\/p>\n

3. Intangible assets<\/p>\n

Intangible assets are the assets without a physical existence. These items represent the intellectual property of a business acquired through their operations, marketing and other efforts to create value. The most notable
\nintangible asset on a balance sheet is Goodwill.<\/p>\n

Other intangible assets found in the financial statements are:<\/p>\n

\u25cf Copyrights
\n\u25cf Trademarks
\n\u25cf Patents<\/p>\n

4. Other assets: All the assets of non-current nature that can not be liquidated
\neasily.<\/p>\n

Final Words<\/h2>\n

Since a company holds the long-term assets for a long period of time, the changes in the long-term assets can be a sign of liquidation in some cases. When investors study the balance sheet of a company, they can see if the company often sells its long-term assets then it can be a sign of financial difficulty.<\/p>\n

Relevance to the SimTrade certificate<\/h2>\n

This post deals with\u00a0Long-Term\u00a0assets which are used by various\u00a0 investors\u00a0to study the financial health of a business.<\/p>\n

Additional courses:<\/h3>\n