No, fixed assets are not current assets. Current assets are any assets that will provide an economic benefit for or within one year. Fixed assets by definition have a useful life of longer than one year. Therefore, fixed assets are considered long-term or noncurrent assets.
Are Fixed Assets Current Assets? FAQs
Fixed assets are long-term tangible assets that a company uses to produce goods and services or for rental purposes. Fixed assets have a useful life of more than one year and typically include land, buildings, vehicles, furniture, computers, equipment, and machinery.
No, fixed assets are not classified as current assets because they do not convert quickly into cash and they take longer periods to be converted into cash. Current assets can be easily converted into cash within one year or the operating cycle whichever is longer.
Current assets are any assets that will provide an economic benefit for or within one year.
The major difference between current assets and fixed assets is that current assets are expected to be converted into cash within one year or the operating cycle, whichever is longer, while fixed assets typically have a useful life greater than one year. Additionally, fixed assets often require significant investments to acquire them whereas some current assets may be acquired with minimal amounts of capital expenditure.
Fixed Assets should be reported in the Non-Current Asset section of the balance sheet. The fixed assets account lists the cost less any accumulated depreciation and provides a net book value for each asset.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
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