What are Long-term Assets

Long-term assets are grouped into several categories like:A long-term, tangible asset held for business use and not expected to be converted to cash in the current or upcoming fiscal year, such as manufacturing equipment, real estate, and furniture.

Fixed assets are long-term, tangible assets held for business use and will not be converted into cash in the current or upcoming year.E.g. Items such as equipment, buildings, production plants and property On the balance sheet, these are valued at their cost.

As the value of the asset declines over the years, depreciation is subtracted from all, except land. Fixed assets are very important to a company because they represent long-term investments that will not be liquidated soon and can facilitate the company’s earnings.Depreciation gives you an estimate of the decrease in the value of an asset, caused by 'wear and tear' or obsolesces.

It appears in the balance sheet as a deduction from the original value of the fixed assets; as the value of the fixed asset decreases due to wear and tear.

Intangible assets are non-physical assets such as copyrights, franchises and patents. Being intangible, it becomes difficult to estimate their value.

Often there is no ready market for them. Sometimes however, an intangible asset can be the most valuable asset a company possesses.