Difference Between Fixed Assets And Current Assets

Difference Between Fixed Assets And Current Assets

Assets properties of a business. They are are usually used to add value to the business organization. 

When assets are classified based on their convertibility into cash, they are classified as either current assets or fixed assets.

1. CURRENT ASSETS
These are assets that can be easily converted into cash and cash equivalents (typically within a year). Current assets are also termed liquid assets and examples of such are:
  • Cash
  • Cash equivalents
  • Short-term deposits
  • Stock
  • Marketable securities
  • Office supplies

2. FIXED OR NON-CURRENT ASSETS
The second type of asset is the non-current assets. Non-current assets are also called fixed assets. They are assets that cannot be easily and readily converted into cash and cash equivalents. Non-current assets are also termed fixed assets, long-term assets, or hard assets. Examples of non-current or fixed assets include:
  • Land
  • Building
  • Machinery
  • Equipment
  • Patents
  • Trademarks

In summary, Current assets are assets that can be easily converted into cash and cash equivalents while Non-current or fixed assets are assets that cannot be easily and readily converted into cash and cash equivalents

Post a Comment

0 Comments