What are assets?
Assets are resources owned or controlled by the entity. They represent probable future economic benefits which can be measured reliably. Assets arise as a result of past transaction or event.
Assets can be classified into two which are current and noncurrent assets.Current and noncurrent assets are reported separately in the statement of financial position.
Current Assets
Current assets are assets that are reasonably expected to be converted in cash, sold or consumed within one year or normal operating cycle, whichever is longer.
Examples of current assets: Cash and cash equivalents; accounts receivable; inventories; prepaid expenses
Noncurrent Assets
Noncuurent assets are all other assets not classified as current assets.
Examples of noncurrent assets: investments; property, plant and equipment; intangible assets
Normal operating cycle is defined as the average time it needs to go spending cash to receiving cash.
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