What is the difference between a short-term asset and a long-term asset?

Short-term assets, also referred to as current assets, are converted into cash within one year. Long-term assets. Long-term assets, also referred to as non-current assets, will benefit businesses for years. 

How does a company benefit from having long-term assets?

Businesses utilize long term assets to operate and generate profits. These long term assets also have a carrying value, or fair market value, which a business may be able to sell the asset at if needed. 

How are long-term assets valued?

Long term assets are determined by taking the book value, or purchase value and reducing that amount by accumulated, or total, depreciation. This yields the carrying value. 

About the Author

Kal Salem

Kal Salem

MA Accounting - Arizona State University

A CPA and finance professional working with small businesses to educate owners and grow alongside their businesses. Kal started his career in public accounting supporting SEC, regulatory, and both internal and external audits. He holds a Masters in Accounting and a BS in Supply Chain Management. Owner at Salem CPA...

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