Inventory is almost always considered a current asset. A current asset is any asset that will provide an economic benefit for or within one year. A non-current asset is an asset that will provide an economic benefit after or for longer than one year. Inventory production is typically closely correlated with demand, so it will almost always be sold within a year or produced, making it a current asset. If an inventory item is expected to sell after a year, it will be a non-current asset.
Is Inventory a Current Or Non-Current Asset? FAQs
Yes, inventory is considered an asset because it has value to the company and can be converted into cash or used in the production of goods.
Inventory is technically a current asset because it is expected to be sold or used within one year.
A current asset is any asset that will provide an economic benefit for or within one year.
A non-current asset is an asset that will provide an economic benefit after or for longer than one year.
Inventory production is typically closely correlated with demand, so it will almost always be sold within a year or produced, making it a current 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.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
