The criteria for classifying an asset as current

Learning objectives

• Identify the criteria for classifying an asset as current.L1
• Determine the classification of an asset from the facts of a case.L1, L2

Normative references

• IAS 1 §66An asset is current when it is expected to be realised, or is intended to be sold or consumed, in the normal operating cycle, is held primarily for the purpose of trading, is expected to be realised within twelve months after the reporting period, or is cash or a cash equivalent that is not restricted; all other assets are non-current.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

3 questions

• An asset held primarily for the purpose of trading is classified as a current asset.L1
• Delta SA's normal operating cycle is 18 months. At 31 December 2026, which of its assets is classified as current?L2
• An accountant classifies four assets of Cordier SA at 31 December 2026. Which of the accountant's conclusions is wrong?L2