Long Term Investments

Long-term investment refers to the investment made by the company in debt papers, stocks, real estate, etc with the purpose of holding them for more than 1 year. Companies that generate a significant amount of cash may sometimes decide to invest the excess money, which cannot be deployed back into the business, in real estate or debt or equity instruments. If the idea is to stay invested in these assets for more than 1 year, then they are classified as long-term investments.

This data item appears on the assets side of the balance sheet.