Yes, short-term investments are considered current assets for accounting purposes. Current assets are any assets that can be converted into cash within one year. This counts products that are sold for cash as well as resources that are consumed, used, or exhausted through regular business operations that are expected to provide a cash value return within a single year. Short-term investments and marketable securities are investments in securities that will provide a cash return within a single year. These types of securities can be bought and sold in public stock and bond markets. In the case of bonds, the bond must have a maturity of less than a year to be considered a current asset; in the case of marketable equity, it is a current asset if it will be sold or traded within a year.
Is Short Term Investment a Current Asset? FAQs
Yes, short-term investments are considered current assets for accounting purposes.
Current assets are any assets that can be converted into cash within a period of one year.
Short-term investments and marketable securities are investments in securities that will provide a cash return within a single year.
These types of securities can be bought and sold in public stock and bond markets.
Common examples of short-term investments include money market accounts, certificates of deposit (CDs), treasury bills, and commercial paper.
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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