There are two major types of long-term assets: tangible and non-tangible. Tangible assets include fixed assets, such as buildings and equipment. Intangible assets includes non-physical resources and rights that a firm deems useful in securing an advantage in the marketplace. Examples of intangible assets are copyrights, trademarks, patents and computer programs, financial assets-- including such items as accounts receivable, bonds and stocks-- and goodwill.
Long-term investments are often referred to simply as "investments. " Long-term investments are meant to be held for many years and are not intended to be disposed of in the near future. They usually consist of three possible types of investments: investments in securities (such as bonds), common stock, or long-term notes. Other types of investments include investments in special funds-- e.g. sinking funds or pension funds-- and different forms of insurance.
Fixed assets-- also referred to as property, plant, and equipment-- are purchased for continued and long-term use in generating profit for a business. Fixed assets include asset land, buildings, machinery, furniture, tools, IT equipment-- e.g. laptops-- and certain limited resources-- e.g. timberland and minerals. Most of these, with the exception of land assets, are written off against profits over their anticipated life by accumulating depreciation expenses.
Property, Plant and Equipment
Property, plant, and equipment are tangible, long-lived assets used in the operations of the business. Land, natural resources, buildings, furniture, equipment, and machinery are included in this category. They are listed under the asset portion of the balance sheet.
Capital expenditures are incurred to get the asset "up and running".