Current vs Non-Current Assets
Definition
The split of assets by how soon they are expected to be converted to cash or used. Current assets (cash, receivables, inventory) are expected within a year; non-current assets (property, equipment, long-term investments) are held longer.
Related Terms in Core Accounting
Long-Term Liabilities
Obligations due beyond one year, such as long-term loans, bonds, lease liabilities and deferred tax. They finance longer-term assets and are shown separately from current liabilities on the balance sheet.
Contra Asset
An account that reduces the value of a related asset, carrying a credit balance against the asset's debit balance. Accumulated depreciation and the allowance for doubtful accounts are common examples.
Accumulated Depreciation
The total depreciation charged against a fixed asset since it was acquired. It is a contra-asset account; the asset's cost less accumulated depreciation gives its net book value.
Book Value
The value of an asset or a business as recorded in the accounts — for an asset, cost less accumulated depreciation; for a company, total assets less total liabilities. It can differ significantly from market value.
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