Accounting for long term assets

Businessman holding a touchpadCompanies use assets to produce revenue. Some assets like inventory or office supplies are called current assets. Other assets like equipment or building are used for extended periods of time. These assets are called long term operational assets.

When accounting for long term assets, one of the biggest issues accountants have to deal with is what should be added to the cost of the asset. The cost of the asset is not only the price you pay for the asset but also includes the cost of transportation, insurance, and set up, etc.

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