term "current assets" coined by the International Committee on Standards of accounting and enshrined as such in the standard IAS - the document containing the statement of principles and procedures of accounting standard design.
As stated in the document, the asset is a resource that is acquired by a business or company in the past performance and who is expected to make a profit in the future.Based on the fact that in the definition contains an appeal to the time parameter, distinguish assets on the terms of a possible useful.On this ground, the assets are distinguished:
- long-term (those whose term of possible useful is one year or more);
- current assets (those who have given less than one year).
In addition, international standards and establish the rules under which it is necessary to carry out the classification of assets.For these rules to the current assets include:
- planned use within the operating cycle;
- supposed to be used exclusively for commercial purposes;
- assets planned for implementation within one year;
- those represented in the form of money.
All other should refer to long-term assets.
In accounting, current assets include the following items:
- without exception, commodity-material resources;
- future costs to be written off in the future, during the reporting period;
- cash;
- short-term investments;
- advance payments for the acquisition of the assets themselves;
- current accounts;
- short-term notes;
- short-term receivables.
As a rule, current assets are recorded in accounting in order to reduce their liquidity.The sequence is as follows: cash, investments, accounts receivable (DMZ), inventories and prepayments.In addition, under IAS, various current assets differently reflected in the balance sheet.
Cash - at face value, a reflection of short-term investments is happening or at their market value or at the lower of indicators, which are taken as profitability and market value.On the sum of the expected profit is estimated DMZ, and inventories and advance payments - at cost.
All the assets of the company or companies involved in trafficking, which characterizes not only the market activity, but also economic efficiency.To estimate apply complex figures, one of which is the indicator of movements in current assets.In this sense, the turnover of current assets is a combination of special factors that show the efficiency of each of the species and in particular the financial process.For example, a receivable is recognized and tested by a factor of its turnover.TMZ turnover ratio shows the amount of sales of the average amount of goods and services for a certain period.The provision reflects the respective companies TMZ coverage ratios, which shows or surplus of resources, or the lack of them in the period under review.Very important is the factor that shows the share of each of the types of assets, total current assets of the enterprise.Its role is especially great when planning the development of the enterprise and determination of commercial strategy.
In a comparative analysis of financial statements is used as an indicator as current assets relate to the value of investments attracted by this company for the period of annual turnover.Typically, enterprise industries with high capital have low turnover and distributors - are high.
