Key Concepts
A non-current asset is a resource a business owns or controls that is expected to provide benefits for more than one financial year. The business buys it to use in running the business and help generate income — not to resell it to customers.
Common examples: property, motor vehicles, office equipment, fixtures and fittings, machinery.
The opposite of a non-current asset is a current asset — something used up or turned into cash within one year (for example, inventory, which is bought to be resold, or cash itself).
The use decides, not the item.A computer a business uses to keep its records is a non-current asset (office equipment). Identical computers a business sells to customers are inventory.
Ask: is it kept and used to help earn income over several years, or sold/used up within the year?
Owns or controls.A business doesn't need full legal ownership — an asset it is still paying off in instalments still counts as its non-current asset, because it already gets the benefit of using it.
A non-current asset is a long-term helper: kept and used for more than one year to help the business earn income, never bought to resell. A delivery van carries the goods; it is not one of the goods.
- The camera is a non-current asset (office equipment) — it is used to earn income and will last more than one year.
- If Blue Kite Photography also bought a batch of cheap photo frames to sell to clients, those frames would be inventory, not a non-current asset — they are bought to be resold.
Calling everything a business buys a non-current asset. Items bought to resell (inventory) and small items used up within the year (e.g. printer ink) are not non-current assets.