Concept and types of current assets
Current assets are those that are used simultaneously when you release them into production. The composition of current assets include, in particular, the reserves, raw materials, semi-finished products, VAT on purchased goods short-term receivables (under one year), financial investments, money, etc.
The presence of a sufficient amount of current assets necessary for the normal financial activity of the enterprise, it and raw materials for production, money for calculations with suppliers.
Concept and types of non-current assets
Non-current assets are those, the usage period is more than 12 months. In non-current assets include intangible assets, R & d, fixed assets (buildings, machines, buildings), investments in tangible assets and financial investments with a long period of return), deferred tax assets and other assets.
Differences from working capital non-current assets
The first difference from the working capital non-current assets is the term of repayment. To the reverse it usually is 12 months (in most enterprises of the year is the operating cycle) non-current more than a year.
However, this division is very conditional. The maturity of the asset is not always used as the basis for the classification of the asset as current. A big role in this case plays the liquidity of the asset. For example, receivables with a maturity of over a year is usually the non-current asset, but if the organization can sell it before that period, it can be regarded as a negotiable asset. Thus, noncurrent assets are less liquid than negotiable. They are more difficult to sell, paying in money, and part of current assets - money has absolute liquidity.
Another hallmark of non-current assets is the fact that this part of the enterprise unchanged for a long time. They convey manufactured products, the cost of parts, while circulating fully.
A high proportion of current assets different resource production and trade, while asset-intensive companies (e.g., telecommunications) - have a low proportion.
Companies with a predominance of circulating assets easier to attract short-term loans. Whereas non-current assets require a long-term investment and source of their purchases usually are your own funds.