Current asset

  • Creator
    Topic
  • #188081
    Anonymous
    Inactive

    If an asset (i.e. treasury note) that has a maturity term longer than year has less than a year left in its term, does it become a current asset?

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    Replies
  • #589004
    LeBronJames
    Participant

    In order to be considered cash/cash equiv. original maturity has to be less than 3 months. Is that what you are asking?

    #589005
    jstay
    Participant

    so it could be a current asset, just wouldnt be part of cash/cash equiv

    example

    12/31/x1 year end

    bond bought in 2/1/x1 and maturing 1/31/x1 would be a current asset just not a cash/cash equivalent, am i right?

    #589006
    Anonymous
    Inactive

    @jstay, @Lebron

    Yeah, I think that was what I was wondering. I read that for short-term, highly liquid investments, the original maturity date has to be 3 months or less. But I am wondering for current assets, which is 12 months or less, if it has to be the original maturity date or if it can have a longer maturity term that has 12 months or less left. Thanks man.

    #589007
    jstay
    Participant

    im pretty sure (double check) but if it originally maturing in two years and at the B/S date it is maturing in, say May (5 months out) then it would be current, because it is expected to be liquidated in current cycle.

    #589008
    h0wdyus
    Member

    @jstay

    True, it is considered current asset, it is not treated as cash equivalent

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