Non-current assets
Non-current assets are what your business owns for the long term. See how they work in Irish accounts and for tax.
Published Wednesday 30 September 2026
Table of contents
Key takeaways
- Non-current assets are things your business owns and expects to use for more than 12 months, such as property, vehicles, equipment and trademarks
- Irish company accounts call them fixed assets and group them as intangible, tangible and financial assets under the Companies Act 2014
- You record them at cost, then charge that cost against profit over their useful life through depreciation or amortisation
- For tax, Revenue adds back depreciation and gives relief through capital allowances, such as wear and tear at 12.5% a year
What are non-current assets?
Non-current assets are things your business owns and expects to use for more than 12 months, such as property, equipment, vehicles and patents. They’re also known as long-term assets or fixed assets.
The test comes down to timing. An asset is one of your current assets if you’ll turn it into cash or use it up within 12 months or one operating cycle. Everything else is non-current.
Picture a café in Galway. The coffee beans it buys each week are current assets because they’re used up quickly. The espresso machine behind the counter is a non-current asset that earns money for years.
You record non-current assets on your balance sheet at cost, then charge that cost against profit over the years you use them. Irish company accounts prepared under the Companies Act 2014 call them fixed assets, meaning assets intended for continuing use in the company’s activities.
Types of non-current assets
Non-current assets are grouped by whether you can touch them and how you use them. Most fall into one of these groups:
- tangible assets, which are physical items such as land, buildings, machinery and vehicles, including natural resources like forestry
- intangible assets, which have no physical form, such as patents, trademarks, software licences and goodwill
- financial assets, which are long-term investments such as shares in another company or a loan repayable after 12 months
- right-of-use assets, which give you the right to use leased premises or equipment over the lease term
Natural resources such as timber are depleted as you extract them. Depletion works much like depreciation, matching the cost to the resource you use each year.
Examples of non-current assets
Here are some common non-current assets that Irish small businesses typically hold on their balance sheets. What you own depends on your industry, so a builder’s list will look very different from a design agency’s.
- Land and buildings, such as a shop, workshop or farm
- Machinery and tools, such as a bakery oven or a joiner’s saw bench
- Vehicles, such as delivery vans and company cars
- Office equipment, such as laptops, desks and printers
- Intangible assets, such as trademarks, goodwill and software licences that run for more than one year
- Long-term investments, such as shares you plan to hold for several years
- Right-of-use assets, such as a rented shop unit or a leased van
Current vs non-current assets
The main difference is how quickly an asset turns into cash. Current assets such as cash, stock and trade debtors keep your day-to-day business running, while non-current assets build your capacity over time.
Compared with current assets, non-current assets:
- take longer than 12 months to turn into cash, if you sell them at all
- sit under fixed assets in the Companies Act 2014 balance sheet format, ahead of current assets
- are bought to use in your business, while current assets are bought to sell or use up quickly
- lose value gradually through depreciation or amortisation
- fall outside your current ratio calculation, which compares current assets with current liabilities
Liabilities follow the same 12-month split. Non-current liabilities are debts due after more than 12 months, such as a long-term bank loan, a commercial mortgage or, from 2026, many lease liabilities.
Many businesses fund long-term assets with long-term debt. A five-year loan for a van you’ll use for five years keeps repayments in step with the income the van helps bring in.
How to calculate the cost of a non-current asset
The cost you record for a non-current asset covers everything it takes to get the asset ready to use. Follow these steps to work it out:
- Start with the purchase price on the supplier’s invoice
- Add directly attributable costs, such as delivery, installation and testing that the asset works
- Deduct any trade discounts or rebates from the supplier
- Record the total as the asset’s cost in your fixed asset register and on your balance sheet
For example, a Cork bakery buys an oven listed at €15,000 and gets a €1,500 trade discount. Delivery costs €400 and installation costs €600, so the oven’s cost is €14,500.
Staff training and routine servicing belong in your profit and loss account as everyday expenses. Keeping them out of the asset’s cost gives a truer carrying amount.
How non-current assets appear on the balance sheet
Non-current assets appear on your balance sheet at cost less accumulated depreciation, which gives their carrying amount (also called book value). If you bought equipment for €10,000 and it has €3,000 of accumulated depreciation, its carrying amount is €7,000.
Irish companies follow set balance sheet formats. Schedule 3 of the Companies Act 2014 groups fixed assets under three headings: intangible assets, tangible assets and financial assets.
Lease accounting is changing too. Under amendments to Financial Reporting Standard 102 (FRS 102), lessees recognise a right-of-use asset and a lease liability for most leases. The change applies to accounting periods beginning on or after 1 January 2026. If you lease premises or equipment, expect more non-current assets and liabilities on your balance sheet from then.
Depreciation and amortisation of non-current assets
Depreciation spreads the cost of a tangible asset over its useful life, so each year’s accounts carry a fair share. Choose the method that best reflects how the asset wears out:
- straight-line, which charges the same amount each year, such as €6,000 a year on a €30,000 van used for five years
- reducing balance, which charges a fixed percentage of the carrying amount, so the charge is higher in early years
- units of production, which links the charge to usage, such as the hours a machine runs
Land usually isn’t depreciated because it doesn’t wear out, though buildings on it are. Amortisation does the same job for intangible assets, writing down the cost of a trademark or software licence over the period you benefit from it.
If an asset’s value falls sharply, for example, machinery damaged in a flood, you record an impairment loss. This reduces the carrying amount to what the asset can realistically recover.
Selling or disposing of a non-current asset
When you sell or scrap a non-current asset, compare the sale proceeds with its carrying amount. A higher price gives you a gain and a lower one gives you a loss, and both go in your profit and loss account.
Say you sell a van that cost €30,000 and has €18,000 of accumulated depreciation, giving a carrying amount of €12,000. Selling it for €14,000 gives a €2,000 gain, while selling it for €10,000 gives a €2,000 loss.
Money you spend on an asset after you buy it falls into two camps. Repairs that keep it working, such as new tyres for a van, are everyday expenses. Improvements that extend its life or add capacity, such as a replacement engine, count as capital expenditure and are added to the asset’s cost.
Non-current assets and tax in Ireland
Revenue applies its own rules to non-current assets. The depreciation in your accounts is added back when you work out taxable profit, and you claim capital allowances instead.
As of September 2026, the main capital allowances for Irish small businesses are:
- wear and tear allowances of 12.5% a year over eight years on plant and machinery used wholly and exclusively in your trade
- industrial buildings allowance of 4% a year over 25 years on qualifying industrial buildings such as factories and mills, while offices and shops generally don’t qualify
- accelerated capital allowances of 100% in the first year for qualifying energy-efficient equipment, under a scheme that runs to 31 December 2030
- allowances on specified intangible assets such as patents under section 291A of the Taxes Consolidation Act 1997, for companies only
Your accountant can confirm which assets qualify and when to claim. Talk to them before a major purchase so you can plan the timing.
Why non-current assets matter for your business
Non-current assets are the foundations your business runs on, so knowing what they’re worth helps you plan with confidence. They matter because they:
- generate revenue over several years, such as a van that makes deliveries every day
- can act as security when you apply for a business loan
- show lenders and investors that you’re investing in the business’s future
- tie up cash, so balancing them against your working capital needs keeps enough money free for bills
Track your non-current assets with Xero
Keeping on top of non-current assets gives you a clear picture of what your business owns and what it’s worth. Xero’s fixed asset register records each asset’s cost and calculates depreciation automatically, saving you hours of spreadsheet work.
Balance sheet reports then show up-to-date carrying amounts, ready to share with your accountant. Try Xero today and get one month free.
FAQs on non-current assets
Here are quick answers to common questions about non-current assets.
Is land a non-current asset?
Yes, land your business uses, such as the site under your shop, is a non-current asset. Land a developer buys to build on and sell is stock, which makes it a current asset.
Is stock a non-current asset?
Stock is a current asset because you expect to sell it within your operating cycle. The shelving and tills you use to sell it are non-current assets.
Can a non-current asset become a current asset?
Yes, once you commit to selling it. Under International Financial Reporting Standards (IFRS), an asset you expect to sell within 12 months moves into a separate held-for-sale category.
Do sole traders have non-current assets?
Yes, a sole trader’s van, tools and laptop are non-current assets if they’re used in the business for more than a year. You claim wear and tear allowances on them through your Form 11 tax return.
Should a laptop be recorded as a non-current asset?
Usually, yes, because you’ll use it for several years. You can agree a capitalisation threshold with your accountant and expense cheaper items, which keeps your fixed asset register manageable.
Related terms
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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.