What types of assets are considered current?

The assets considered current vary by industry, but generally, they fall into these sub-accounts: Cash and Cash Equivalents, Marketable Securities, Accounts Receivable, Inventory, and Other Liquid Assets. Current Assets is an account on a balance sheet that represents the value of all assets that could be converted into cash within one year.

How long does it take to convert assets to cash?

Ownership transfer must also be secure and easily facilitated. In some cases, the amount of time to cash conversion will vary. The most liquid assets are cash and securities that can immediately be transacted for cash. Companies can also look to assets with a cash conversion expectation of one year or less as liquid.

What are current assets & cash equivalents?

By definition, assets in the Current Assets account are cash or can be quickly converted to cash. Cash equivalents are certificates of deposit, money market funds, short-term government bonds, and treasury bills. To qualify as current assets, these items must not have any restrictions that inhibit their short-term liquidity.