Question

What is a long-lived asset? How does Best Buy account for long-lived assets, and what would these be?

Answer 1

A long-lived asset or a non-current is an asset which is retained or held in the company for its use/personal(productional) purpose for at least a year.

There are two types of non-current assets:

1. Tangible assets
2. Intangible assets.

long term assets are purchased in the company, not for resale in the near future but are purchased for the production in the company and hence in the time of the asset depletes its value by continues use and thus the cost o the asset is reduced by depreciation in case of tangible assets and through amortization in case of intangible asset over the expected useful life of the asset.

About Best buy Co. the assets in the company can be classified into two categories the assets( which are intended to be sold to the public) and other assets which the company has

1. about the first mentioned categories, they are treated as inventory and not as long term assets since it is intended to be sold to the public and is their main source of income generation

it is not that the long term assets are not sold-off but even when the assets are sold off due to assets being obsolete or any other matter it is not the main source of income for the company. But in the case of best buy the sale o these assets are the main source o income and thus the assets are treated as inventories

2. the second mentioned categories include both current and non-current assets and are classified by the standards set to them

In these assets, the long term assets are not maintained to be sold off quickly