Plant and Intangible Assets

  Together plant an intangible assets make up a significant part of corporate balance sheets because they represent major investments of resources. The future of many business enterprises depends on their investments in plant and intangible assets .

Plant Assets as a "STREAM OF FUTURE SERVICES"
 
  Plant assets represent a bundle of future services and thus can be thought of as long-term prepaid expenses. Ownership of a delivery truck for example may provide about 100000 miles of transportation. the cost of the truck is entered in an asset account , which in essence represent the advance purchase of these transportation services. similarly a building represents the advance purchase of many years of housing services . as the years go by these services are utilized by the business and the cost of plant asset gradually is transferred to depreciation expense to reflect the cost of using the asset to generate revenue.