Current assets are those assets that are expected to be used (sold or consumed) within 12 months.
Current assets include (according to the IFRS):
- Current inventories
- Trade and other current receivables
- Current tax assets
- Current biological assets
- Other current financial assets
- Other current non-financial assets
- Cash and cash equivalents
- Current non-cash assets pledged as collateral for which transferee has right by contract or custom to sell or repledge collateral
On a balance sheet (statement of financial position), assets are typically classified into current assets and non-current assets (long-term assets). An entity shall classify an asset as current when (IFRS, IAS 1):
- it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;
- it holds the asset primarily for the purpose of trading;
- it expects to realise the asset within twelve months after the reporting period; or
- the asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.
All other assets shall be classified as non-current assets.
Creditors will often be interested in how much that company has in current assets, since these assets can be easily liquidated in case the company goes bankrupt. Current assets are important to most companies as a source of funds for day-to-day operations. The current asset position of a company is often assessed through current ratio.
IFRS Taxonomy (XBRL) reference for current assets is "CurrentAssets"