Whether an asset should be reported as current or non-current, depends on whether the asset is in the form of cash or will be realised or consumed within the ensuing operating cycle of the entity.

Question

Quizplus · Accepted Answer

This statement correctly explains the basis for classifying assets as current or non-current. Assets that are expected to be realised or consumed within the operating cycle of the business are typically classified as current assets, while those that will be held longer than one cycle are classified as non-current assets. Cash can be classified as either current or non-current depending on the intended use and availability for operating activities.

Whether an Asset Should Be Reported as Current or Non-Current