Current assets
Current assets are the assets expected to turn into money within a year: cash and cash equivalents, short-term receivables, inventories and prepaid expenses.
Definition
The order on the balance sheet follows liquidity: first cash and bank, then receivables, then inventories. From that order the liquidity ratios can be read without arithmetic.
High current assets are not automatically good: large inventories and old receivables tie up money. The item only becomes informative in relation to short-term liabilities.
The wording
Cash and cash equivalents and other assets that will probably be converted into cash and cash equivalents within one year of the balance sheet date or within the normal business cycle, or otherwise realised, must be recognised as current assets. All other assets must be recognised as fixed assets.
Where to read it
What the software must be able to do
The check is the structure in the balance sheet output and the link to the subsidiary ledgers: the receivables figure on the balance sheet must match the open items — automatically, not after a manual reconciliation.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Cost centre Debit and credit Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules