CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which of the following is (are) long-term asset?

I. An idle building
II. Land held by land developers or subdividers
A. I only
B. Both of them
C. Neither of them
Explanation: I is an investment. II is inventory.

User Contributed Comments 16

User Comment
steveumd Isn't an investment in land (I) a long term asset?
tony1973 I think the explanation clearly explains the difference.
murli Good one, Idle building is an investment not LTA!
yanpz Idle building is not used for operation of business, that I agree. But if it's not Long Term Assets, what is it in Balance Sheet? Current Assets??? That will be ridiculous. Could someone explain why an investment can't be a long-term asset?
tengo It is just a matter of classification. If an asset is long term and held for use in operations, it is a long term asset. If you are speculating and its is a long life asset then it is classified as a long term investment. But I got it wrong also since I assumed it was being held for future capaccity in ops.
danlan I think idle means it is not used in operating, so it is more an investing.
boddunah long term assets are used in business operations and not for resale. "idle" was key.
arendb In terms of Balance sheet it will be classified as Non-Current.
gill15 Am I going bananas or something..?

NonCurrent(Long term Asset) assets include PPE, intangible assets, INVESTMENT PROPERTIES, financial assets....

if I. is an investment, why is it not included?
alles I was going to write the same thing as gill15.
mbeliackas amazing
nascfa agree with gil..
AyoyinkaJ I think the major reason "idle" land is because it will not generate future economic benefits..remember the definition of an asset is that it will generate "future economic benefits"...just my thoughts...
markbucfa The answer is correct if the parameters are specific that the building is held for sale.
alexsar75 idle asset does not providing economic benefit
gomez1234 ok it doesnt but then where do you classify an idle building in balance sheet?
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