Current assets definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Current assets can be defined as: Cash and other assets expected to be sold, collected, or used within a year or the company’s operating cycle, whichever is longer. Current assets are often thought to be more liquid assets, current assets being closer to cash, assets that will convert to cash within a year or assets that will be consumes in the goal of generating revenue in a year. Current assets can be contrasted with long term assets or property plant and equipment. A non current asset like land is not as liquid as a current asset and cannot be used to pay off current obligations as easily. Current assets can be compared to current liabilities, liabilities due within a year. It is useful to know if we can cover our current liabilities with our current assets.
