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Financial Reporting and Analysis, Long-Lived Assets – an Overview

Blog article 2, Reading 26, Long-Lived Assets (2020 Curriculum)
The definition of long-lived assets is that they are expected to generate economic benefits over a future period of time. We first need to differentiate between

– recognition and

– measurement.

For measurement purposes, one must decide whether
– the acquisition costs are capitalized and allocated as expenses
over the term as expenses, or
– are recognized directly as expenses in the income statement in the first period.
We distinguish between the following long-lived assets
– so-called tangible assets, i.e. property, plant and equipment,
– intangible assets and
– financial assets.
Tangible assets are property, plant and equipment. Intangible assets have no physical substance, they are intangible. Finally, financial assets are investments in equity or debt capital, namely debt securities.

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