The primary characteristic that distinguishes property, plant, and equipment from inventory, prepaid expenses, and investments is the intention to use property, plant, and equipment as a part of the operations of the client's business over their expected life.

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Property, plant, and equipment are tangible assets needed for the long-term operations of a business, while inventory, prepaid expenses, and investments are used for shorter-term purposes. The intention to use property, plant, and equipment in the operations of the business over their expected lives is what distinguishes them from other types of assets.

The Primary Characteristic That Distinguishes Property, Plant, and Equipment from Inventory