Usually, I say usually because there is always exceptions to the rule, usually the assets on a company\u2019s balance sheet are divided into two big groups \u2013 current and non-current. There\u2019s \u201cassets\u201d and then there are the subgroups that are distinguished by their liquidity.\u00a0<\/p>\n
Just showing them in one group would give us all the resources the company owns \u2013 it\u2019s cash, receivables, inventory and equipment. Making a distinction however between them means we\u2019re able to identify which of those we\u2019re able to sell or liquidate easier. That\u2019s the main goal of the current and non-current assets shown separately.<\/p>\n
When you think about, it makes most sense with receivables, i.e. loans you\u2019ve given out for an example. If a loan balance is due in 3 years and not a single payment is done within next 12 months, the balance isn\u2019t going to be redeemed in near future, right? So it doesn\u2019t really seem fair to disclose this in the same group as your cash balance that you can use right away or your regular receivables that you can also collect pretty soon and in real cash. As such this loan balance is shown under non-current assets.<\/p>\n
If someone tells you they\u2019re coming right away and they actually show up hours later, one could also argue which was quick now \u2013 half an hour that would have taken him to get to you or hours that it really took. Obviously one is quicker and it\u2019s the same with assets \u2013 for some you can get money faster and as such, assets you\u2019re likely to sell for cash or get cash for within the next 12 months are your current assets and everything else is non-current.<\/p>\n","protected":false},"excerpt":{"rendered":"
Usually, I say usually because there is always exceptions to the rule, usually the assets on a company\u2019s balance sheet are divided into two big groups \u2013 current and non-current. There\u2019s \u201cassets\u201d and then there are the subgroups that are distinguished by their liquidity.\u00a0<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,48],"tags":[],"class_list":["post-3851","post","type-post","status-publish","format-standard","hentry","category-4-reporting","category-4-3-balance-sheet"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t