CFA Practice Question

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CFA Practice Question

Long-lived assets refer to ______.

A. assets that are held by a company for more than one year
B. tangible fixed assets including plant and machinery
C. resources that are used to provide services to a company and are not bought with the intention of resale
Correct Answer: C

Long-lived assets are used by the productive or administrative sides of a company to support the company's business but are not bought for resale; these include tangible and intangible assets. They do not include items such as inventory, although inventory could also be held long-term.

User Contributed Comments 6

User Comment
chamad the other answers are not wrong but C is most appropriate!
rocyang still, c doesn't refer to the "long-lived" part
Jurrens "not bought with the intention of resale" relates to the long-lived part, seeing that the company keeps the asset for its entire useful life
2014 Investments in subsidiaries may support to the company and hence ... long lived
bidisha more likely than not its the longer answer for descriptive q's
Ewan2015 C is not correct a resource could meet the definition of C and not be a long lived asset if it is consumed within a year or a business cycle. For example prepayment of IT services for the year would be an asset and meet the above definition at C but would not be a long lived asset as it is a current asset.
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