non-current assets

Question 1

what is a current asset?

Answer 1

these comprise assets that the firm intends to trade or consume within the next 12 months

Question 2

what are non-current assets?

Answer 2

these comprise assets that a firm intends to keep for 12+ months

Question 3

what is capital expenditure?

Answer 3

this concerns expenditure is made on things that the firm intends to keep for more than 12 months (ie on non-current assets) rather than expense at the time. When a firm incurs a cost which it takes in the value of a non-current asset, rather than as an expense through the SOPL, the cost is said to be capitalised

Question 4

what is revenue expenditure?

Answer 4

this involves costs which are either expensed immediately or result in the creation of an asset which will be consumed or traded in the short term (ie current assets)

examples of costs that are expensed immediately include rent, utility expenses, advertising, maintenance, repairs, employee costs, software licence costs

Question 4

what do a firm’s operating assets comprise of?