A firm that has a promissory note that requires the borrower to repay the loan with interest in specified monthly or annual installments has a long term.
What is long term?
- Long term" refers to the extended period of time that an asset is held. Depending on the type of security, a long-term asset can be held for as little as one year or for as long as 30 years or more.
- Generally speaking, long-term investing for individuals is often thought to be in the range of at least seven to 10 years of holding time, although there is no absolute rule.
- Short-term investments are marked-to-market, and any declines in their value are recognized as a loss, where increases are not recognized until sold.Long-term investments are recorded on the asset side of a company's balance sheet as investments.
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