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Chapter Accounting of non-current
Chapter seven: Accounting of non-current assets
Seven assets

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Introduction

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Accounting for non-current assets is an essential part when you prepare statement
of financial position. In this chapter, you will learn property, plant and equipment,
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with a focus on their valuation, depreciation, and disposal. Accounting of non-
current assets is a multifaceted process that necessitates a thorough understanding
of the principles and methods used in financial accounting. In this chapter, you will
learn nature, types, valuation and measurement methods, depreciation and disposal
of property, plant and equipment. Also, you will learn how to prepare and maintain
accounting records related to non-current assets particularly valuation, depreciation
and disposal of non-current assets. The competencies developed will enable you to
demonstrate an understanding of concepts and principles applied in the accounting
of non-current assets and have ability to prepare and maintain records related non-

current assets. (a) It is held for use in the production or
The absence of non-current
assets in the financial position supply of goods or services, for rental
statement
to others, or for administrative usage;
and
Nature and types of non- (b) It is expected to be used for more than
current assets one accounting period/year.

“Property, plant, and equipment are part of
non-current assets, which are assets whose Non-current assets can have either physical
useful life is expected to last longer than or non–physical presence. As a result,
one accounting period (More than a year). we have tangible non-current assets and
They are resources that an organisation intangible non-current assets. Tangible
acquires with the aim of using them in its assets as the ones that can be brightly
business operations for a long-term period. seen, touched or felt. Tangible non-current
These non-current assets are not available assets including land, building, machinery,
for resale. In summary, the key features of vehicles computers and other equipment

a non-current asset are as follows: are commonly known as property, plant

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