What are long-term assets?

Written by: OP Light Entrepreneur Team

Long-term fixed assets refer to equipment, machinery, or other larger investments for a company, which are intended to be used in the company's income generation for more than three years and its acquisition price exceeds the limit of 1 488 euros (incl. VAT 24%).

Such purchases include, for example:

  • Log splitters
  • Massage tables
  • 3D printers
  • Golf simulators
  • DJ equipment and other instruments
  • Trailers
  • Professional kitchen equipment
In the OP Light Entrepreneur service, it is now possible to add long-term fixed assets to the accounting up to €30,000 at a time. The added fixed assets are listed in the accounting as assets and their use is deducted as a company expense over several years as depreciations.

Read more about how long-term assets are handled in accounting in our support article

What larger purchases can I deduct in accounting?

You can add to the accounting ordinary machinery and equipment related to the company's income acquisition. The purchase price can be over €1,488 (incl. VAT 24%) and have an economic life of over three years. At the same time, there can be long-term acquisitions in the accounting up to a maximum of €30,000 (VAT 0%).

Deductible purchases include, for example, laser cutters, 3D printers, musical instruments and other machines or equipment used in business operations. If you are acquiring a device worth more than €1,488, but are not sure of its deductibility, please contact us chat customer service and we will look into it.

Restrictions on purchases in the service

However, the deductibility in some purchases classified as long-term fixed assets is limited for the time being.

These purchases cannot be added to the accounting:

  • Equipment related to the same entity, if purchases have been made in different VAT periods.
    For example, if the VAT period is a year and you buy the same equipment on 5.12. and 15.1.
  • Vehicles, such as cars and vans*
  • Inventory*
  • Business loan*
  • Long-term licenses**
  • Real estate, land areas and other valuable property
*Processing these in the accounting is not yet possible, but we will enable them in the future.
**Long-term licenses can be added on a case-by-case basis as regular expense.

Exceptions that do not fall under long-term acquisitions

Ordinary computers, laptops, phones, cameras, drones, and other related small electronics are usually treated as regular expenses, even if they are somewhat over €1,488 in value or if they are used for more than three years in the company's operations.

Also, purchases intended for sale do not belong to long-term assets. These include, for example, air-source heat pumps intended for sale to customers or other equipment purchased for sale, which is sold within the same calendar year.

Add the above to the accounting normally with the New Expense -function, we check the deductibility and deduct them in the accounting at once according to the purchase date.

EXAMPLE

As a carpenter, you can acquire power tools for your business, the price of which is a maximum of 30 000 €.

How is long-term assets added to the accounting?

You can add larger purchases to the service by logging into your user account and selecting NewLong-term assets from the navigation. Read the restrictions and instructions first and enter the purchase information into the provided fields:

  • Add a picture or PDF file of the receipt, invoice, or deed of sale, and enter the payment date of the acquired device
  • add the name of the acquired product, e.g. Trackman Golf simulator
  • add a description of the purchase in the Explanation field and add the purchase price (incl. VAT)
  • select the country of purchase and VAT rate
  • add the estimated lifespan in years as a number, e.g. "5"
  • finally, press the Save asset -button.

The accountant checks the purchase and adds it to the accounting. Purchases are deducted in the accounting as a residual-cost depreciation of 25% annually from its current value. The VAT portion of the purchase is deducted at once.

Read more about the impact of long-term purchases on accounting and taxation in our support article

How long term assets are handled in accounting?

Read more