When is an asset considered a non-current asset?

An asset is considered a non-current asset when it is expected to generate future economic benefits for more than 12 months. Non-current assets are essential for a business as they typically include long-term investments, property, plant, equipment, and intangible assets that the company intends to use over a longer period. The classification of an asset as non-current indicates its role in supporting the company’s operations and growth over a significantly extended time frame, rather than being anticipated for immediate conversion to cash or short-term use.

The other options do not align with the standard definitions or criteria for classifying assets. For instance, an asset expected to provide benefits within 3 months would be categorized as a current asset, reflecting short-term usage. Mentioning a non-fixed asset does not provide clarity on the non-current attribute since non-current status is not limited to the type of asset; it centers around the duration of benefit realization. Lastly, an asset sold to a third party does not determine its classification as a non-current asset, as assets can be sold irrespective of whether they are current or non-current. Thus, the emphasis on the expected timeframe of benefits establishes option B as the correct definition of a non-current asset.