{"id":205803,"date":"2021-05-19T12:42:58","date_gmt":"2021-05-18T23:42:58","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=205803"},"modified":"2021-06-30T19:58:35","modified_gmt":"2021-06-30T06:58:35","slug":"current-assets-vs-fixed-assets","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/business-structures\/current-assets-vs-fixed-assets\/","title":{"rendered":"What is the Legal Difference Between Current Assets and Fixed Assets in New Zealand?"},"content":{"rendered":"

There is a lot of complex terminology for the accounting and legal questions in your business. It can sometimes be easy to confuse different concepts. Understanding the differences between asset types is essential when thinking about your business\u2019 position, strength and balance sheet<\/a>. However, it can be difficult to always distinguish between them, particularly current assets and fixed assets. This article will explain current assets and fixed assets, analyse the differences between them and what this practically means for your business.<\/span><\/p>\n

What is a Current Asset?<\/span><\/h2>\n

A current asset is something your business owns or possesses that you can easily sell or convert into cash. Other forms of current assets, like stock or inventory for your business, are assets that are designed to be used within a year. You can think about current assets as items that your business could quickly turn into money to pay an unexpected expense or debt if required. This certainly includes money already in your bank account. It also includes other, less obvious assets like money that other businesses owe to you.\u00a0<\/span><\/p>\n

When thinking about which of your business\u2019 assets are current assets, look at items like:<\/span><\/p>\n