Non current asset: PPE

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Student
141 Points Posted on 04 June 2020
Dear all,

Why do we classify PPE in 9th year i.e. on 31st March balance sheet of the 9th year as Non current asset even if the PPE has a useful and economic life of 10 years only?
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On 04 June 2020 at 11:20 Report
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Quick Summary
Property, Plant, and Equipment (PPE) is classified as a non-current asset even if its useful economic life is only 10 years and it's in its 9th year. This is because PPE is not expected to be converted into cash through sale at the end of its useful life. Assets are carried on the balance sheet until they are sold or discarded, regardless of their remaining economic utility.

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Student
1321 Points Posted on 06 June 2020
You are not going get cash by selling the asset at the end of its useful life immediately.
So it is not classified as Current Asset
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On 06 June 2020 at 14:23
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42 Points Posted on 07 June 2020
PPE will never be classified as current assets even you have utilised the economic life of the assets. You need to carry the assets until you sell or discarded
1 Reply
On 07 June 2020 at 12:03

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