Non-current assets
Learn what non-current assets are, their main types, and how they're depreciated and taxed in Canada.
Published Thursday 23 July 2026
Table of contents
Key takeaways
- Non-current assets are things your business owns for long-term use and can't easily turn into cash within a year, which is why they're also called long-term assets.
- They fall into a few groups: tangible fixed assets, intangible assets, long-term investments, and natural resources.
- Non-current assets are capitalized on the balance sheet rather than expensed, then their cost is spread over time through depreciation or amortization.
- In Canada, the cost of most depreciable business property is deducted for tax through the capital cost allowance set by the Canada Revenue Agency.
What are non-current assets?
Non-current assets are assets and property owned by a business that are not easily converted to cash within a year. They may also be called long-term assets.
These assets are held for long-term use and are expected to help generate income over several years. They sit apart from current assets, which you expect to use up or turn into cash within 12 months.
Types of non-current assets
Non-current assets cover a few different categories. Most fall into one of these groups:
- Tangible fixed assets such as property, plant, equipment, and vehicles
- Intangible assets such as patents, copyrights, trademarks, and goodwill
- Long-term investments such as bonds and stocks held for more than a year
- Natural resources such as timber, minerals, and oil reserves
Non-current assets vs current assets
The difference between the two comes down to how quickly you expect to use or convert the asset. Understanding the split helps you read your balance sheet and judge your short-term financial health.
- Non-current assets support the business for more than a year and are hard to convert to cash quickly, for example machinery or a patent
- Current assets are expected to be used or turned into cash within a year, for example cash, inventory, and accounts receivable
How non-current assets appear on the balance sheet
Non-current assets are capitalized instead of being expensed like current assets. Rather than listing the asset as an expense on the income statement, you add it to the balance sheet and spread its cost over its useful life.
On the balance sheet, non-current assets are usually listed below current assets and carried at their book value, which is the original cost less any accumulated depreciation or amortization. For a fuller picture of how these entries fit together, see the Xero guide to assets and liabilities.
Depreciation and amortization of non-current assets
Because non-current assets are used over many years, their cost is spread across that time rather than claimed all at once. The method depends on the type of asset.
- Depreciation spreads the cost of tangible assets, such as equipment and vehicles, over their useful life
- Amortization spreads the cost of intangible assets, such as patents and software, over their useful life
You can learn how these calculations work in the Xero guide to depreciation. For tax, Canadian businesses generally deduct the cost of depreciable property through the capital cost allowance set by the Canada Revenue Agency, which can differ from the depreciation shown in your accounts.
Why non-current assets matter for your business
Non-current assets show the long-term resources your business relies on to keep operating and growing. Tracking them well gives you a clearer view of your finances and helps you plan ahead.
- They reflect the long-term value and productive capacity of your business
- They affect how lenders and investors assess your financial position
- They shape budgeting decisions about repairs, replacements, and new purchases
Manage your assets and depreciation with Xero
Keeping your non-current assets organized is easier when your records live in one place. With Xero, you can track fixed assets, run depreciation, and see how everything flows onto your balance sheet, so you always know what your business owns. Get started and get one month free.
FAQs on non-current assets
Here are answers to frequently asked questions about non-current assets.
Is a non-current asset the same as a fixed asset?
Not quite. Fixed assets are one type of non-current asset, alongside intangible assets, long-term investments, and natural resources.
What is an example of a non-current asset?
Common examples include buildings, machinery, vehicles, patents, and long-term investments such as bonds. They're all held for use over more than a year.
Are non-current assets depreciated?
Tangible non-current assets are depreciated over their useful life, while intangible assets are amortized. Land and long-term investments are usually not depreciated.
How are non-current assets taxed in Canada?
Canadian businesses generally can't deduct the full cost of a non-current asset in the year they buy it. Instead, they claim the cost over time through the Canada Revenue Agency's capital cost allowance.
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Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.