As with liabilities, assets as well are spread into two major groups. Within assets on your balance sheet you can have two types of assets, both current and non-current. 

Current assets are also defined as your most liquid assets that you expect to be exchanged to cash within the next 12 months. I say cash since if you think about, what’s part of your current assets – your receivables you expect to collect (that is, get cash in return), inventories you expect to sell and eventually also receive cash for them (as sales relate to receivables) and well, cash itself. Yes, there are obviously other assets as well that can be considered as current assets and which for instance have already been settled with cash, i.e. prepayments. They are your assets in the sense that you have the right to request something in return for the payment already done. The ‘right’ to claim something is your asset.

Non-current assets are those that you don’t expect to sell within the next 12 months essentially. There are also assets you don’t expect to be settled within the next 12 months, i.e. receivables with longer payment terms, loans etc. Part of your non-current assets are also your tangible and intangible assets you use in your business, for your production.