Non-current assets
Non-current assets are what your business owns for the long haul. See examples and how Singapore taxes them.
Published Wednesday 30 September 2026
Table of contents
Key takeaways
- Non-current assets are resources you expect to hold for more than 12 months, such as property, equipment, patents and long-term investments
- Fixed assets, also known as property, plant and equipment, are only one type of non-current asset
- You record non-current assets at cost, then reduce their value through depreciation or amortisation to reach their carrying value
- In Singapore, accounting depreciation isn’t tax-deductible, so you claim capital allowances from the Inland Revenue Authority of Singapore (IRAS) instead
What are non-current assets?
Non-current assets are resources your business owns and expects to use for more than 12 months. Also called long-term assets, they include property, equipment, vehicles and patents.
The 12-month line is what separates them from short-term items like cash and inventory. Think of a bakery: the flour it’ll use this week is a current asset, while the oven it’ll bake with for years is non-current.
Singapore’s financial reporting standards are based on IFRS Accounting Standards. Under these standards, non-current assets are assets you won’t convert to cash within one year, so they sit apart from current assets on your balance sheet.
Key characteristics of non-current assets
Most non-current assets share four traits. Together, they explain why these items sit apart from your day-to-day cash.
- You expect to hold them for longer than 12 months
- They’re hard to turn into cash quickly without disrupting your operations
- You use them to run the business and earn revenue, rather than to resell
- You record their cost as an asset, then spread it over the years you use them
Types of non-current assets
Non-current assets fall into four broad groups. The group depends on whether an asset is physical, a legal right, a natural resource or a financial holding.
Tangible assets
Tangible assets are physical items such as buildings, machinery, delivery vans and office furniture. This group is known as property, plant and equipment, or fixed assets on the balance sheet. They wear out over time, so you spread their cost through depreciation, except for land, which isn’t depreciated.
Intangible assets
Intangible assets have no physical form but still hold value for your business. Examples include patents, trademarks, copyrights, goodwill and software licences. A patent expires after a set term, while a trademark can last as long as you keep renewing it.
Natural resources
Natural resources include oil, gas, timber and mineral deposits that a business extracts and sells. They only count as non-current assets when your business is actively extracting them.
As you extract a resource, its value falls through a process called depletion. It works like depreciation but applies to resources taken from the earth.
Long-term investments
Long-term investments are financial assets you plan to hold for more than 12 months. Examples are shares in another company or a fixed deposit that matures in two years. They don’t wear out, so you don’t depreciate them.
Non-current assets examples
Here are common non-current assets that small businesses in Singapore typically hold on their balance sheets.
- Land and buildings, such as an office or warehouse
- Machinery and production equipment
- Company vans and delivery vehicles
- Computers and phone systems
- Patents and trademarks that protect your products or brand
- Goodwill from buying another business
- Shares in another company held for more than 12 months
The mix on your balance sheet depends on your industry. A renovation contractor might hold heavy tools and lorries, while a software start-up’s most valuable assets could be its code and trademarks.
Current vs non-current assets
The main difference between current and non-current assets is how quickly they turn into cash. Knowing the split helps you read your balance sheet with confidence.
Here’s how the two groups compare.
- Current assets turn into cash within 12 months, while non-current assets stay in the business for longer
- Current assets have their own balance sheet section, separate from non-current assets
- Current assets are usually recorded at realisable value, while non-current assets show cost less depreciation or amortisation
- Current assets cover short-term bills, while non-current assets support revenue over many years
- Current assets include cash and accounts receivable, while non-current assets include property and patents
Lenders look at this split when they check your liquidity ratios, because only current assets can pay near-term bills quickly.
The same 12-month test applies to what you owe. Non-current liabilities are debts you don’t need to settle within a year, such as long-term loans or mortgages. Reading them next to your non-current assets shows your long-term financial position.
How non-current assets appear on the balance sheet
Non-current assets have their own section on the balance sheet, often listed above current assets. This section gives you and your lenders a snapshot of the resources your business will rely on for years.
Each asset starts at its original cost, including the purchase price and any costs to get it ready for use. Over time, you subtract the depreciation built up so far or amortisation. The result is the carrying value, also called book value.
For example, say you bought equipment for $10,000 and it has $3,000 of accumulated depreciation. Its carrying value on your balance sheet is $7,000. With Xero, you can track fixed assets and their depreciation in one place.
How to calculate non-current assets
Total non-current assets is the sum of the carrying values of everything you expect to hold for more than 12 months. Follow these steps to work it out.
- List every asset you expect to keep for longer than 12 months
- Record each one at its original cost, including any set-up or installation costs
- Subtract accumulated depreciation, amortisation and any impairment to get each carrying value
- Add the carrying values together to get your total
Say you run a café with a delivery van that cost $60,000 and has $12,000 of accumulated depreciation. Its carrying value is $48,000. Your coffee machines cost $15,000 and have $5,000 of depreciation, leaving $10,000.
You also hold a software licence bought for $4,000 with $1,000 of amortisation, plus a $6,000 fixed deposit that matures in two years. Your total non-current assets are $48,000 + $10,000 + $3,000 + $6,000, which equals $67,000.
Depreciation and amortisation of non-current assets
Depreciation and amortisation spread the cost of a non-current asset over the years you use it. That way, the expense lands in the same periods as the revenue the asset helps you earn.
Depreciation applies to tangible assets such as machinery and vehicles. The common straight-line method divides the cost evenly across the asset’s useful life. A $9,000 oven used for three years costs $3,000 a year.
Amortisation works the same way for intangible assets with a finite life, such as a software licence. Goodwill is treated differently: it isn’t amortised, and goodwill is tested for impairment regularly instead.
Impairment is a one-off write-down when an asset’s value drops unexpectedly, for example after damage or a fall in market demand. It reduces the carrying value to the amount you can realistically recover.
Capital allowances for non-current assets in Singapore
In Singapore, you can’t deduct the depreciation in your financial statements for tax. Instead, you claim capital allowances on qualifying plant and machinery used in your business, under Sections 19 and 19A of the Income Tax Act 1947.
According to IRAS guidance on claiming capital allowances, you can write off a qualifying asset in one of these ways.
- Claim 100% in one year for computers, prescribed automation equipment and low-value assets costing up to $5,000 each
- Spread the claim over three years, at a third of the cost each year, for any qualifying asset
- Claim over the prescribed working life, starting with a 20% initial allowance, then yearly allowances on the remaining 80%
Low-value asset claims are capped at $30,000 per Year of Assessment (YA). From YA 2023, the working life options under Section 19 are six, 12 or 16 years.
Private cars with S-plates don’t qualify, while a website can be written off in one year. When you sell a fixed asset, you may get a balancing allowance, which is deductible, or a balancing charge, which is taxable.
Why non-current assets matter for your business
Non-current assets are the equipment, property, patents and investments that help you earn revenue for years. They shape your planning in several practical ways.
- Generate revenue over several years, supporting long-term profitability
- Give lenders security, since property or equipment can back a loan
- Signal whether you’re expanding or scaling back, based on how much you invest
- Lower your tax bill, as capital allowances on qualifying assets reduce your chargeable income
They also affect the numbers lenders check. Paying cash for equipment moves value out of current assets, which lowers your current ratio even though total assets stay level.
Add your non-current assets to your current assets, subtract everything you owe, and you get your business’s net worth. Accurate asset records keep that figure reliable and help you claim the right allowances.
Track your non-current assets with Xero
Knowing what each asset is worth today, and how it’s treated for tax, helps you plan purchases and talk to lenders with confidence. Xero keeps your asset register and balance sheet in step, so your figures are ready when you need them.
Choose a plan that suits your business and get one month free.
FAQs on non-current assets
Here are quick answers to common questions about non-current assets.
What’s the difference between fixed assets and non-current assets?
Fixed assets are the physical part of your non-current assets: property, plant and equipment. Every fixed asset is non-current, but intangibles and long-term investments are non-current assets that aren’t fixed assets.
Is prepaid rent a current or non-current asset?
Rent you’ve prepaid for the next 12 months is a current asset. If you prepay two years upfront, the portion covering the second year is non-current.
Is a laptop a non-current asset or an expense in Singapore?
In your accounts, a laptop you’ll use for several years is usually recorded as a non-current asset and depreciated. For tax, computers qualify for a 100% write-off in one year, so your tax deduction can arrive well before the depreciation does.
Are non-current assets part of working capital?
No, working capital is current assets minus current liabilities, so it only counts resources you expect to use within 12 months. Selling a non-current asset, such as an old van, adds to working capital once the cash arrives.
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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.