Current assets vs fixed assets: key differences and examples
Learn how current and fixed assets differ, how to classify them, and how Indonesia's tax rules treat each.
Published Wednesday 30 September 2026
Table of contents
Key takeaways
- Current assets are resources you expect to turn into cash or use up within 12 months, such as bank balances and stock.
- Fixed assets are long-term resources you use for more than 12 months, such as vehicles and equipment, and most lose value through depreciation.
- Indonesia’s accounting standards and tax regulations set separate rules for classifying and depreciating assets, so your book and tax figures can differ.
- Classifying assets correctly gives you a clearer view of your cash flow and helps you plan large purchases.
What are current assets?
Current assets (aset lancar) are resources you expect to turn into cash or use up within 12 months. They’re the short-term assets that keep your business running day to day.
For example, the coffee beans in a café’s storeroom and the cash in its till are current assets. The café will use the beans and bank the cash within weeks.
In Indonesia, the Statement of Financial Accounting Standards (PSAK) 201 sets out when an asset counts as current. The Indonesian Institute of Accountants (IAI) renumbered this standard from PSAK 1 to PSAK 201, effective 1 January 2024. Under paragraph 66 of PSAK 201, an asset is current if:
- you expect to sell or use it within your normal operating cycle
- you hold it mainly for trading
- you expect to realise it within 12 months after the reporting period
- it’s cash or a cash equivalent
Together, your current assets make up the positive side of your working capital. Lenders and investors look at them to judge whether you can cover your short-term debts.
Examples of current assets
Here are the most common types Indonesian small businesses hold:
- Cash and bank balances, including term deposits that mature within 12 months
- Money customers owe you on unpaid invoices, known as accounts receivable
- Inventory or stock you plan to sell
- Prepaid expenses, such as insurance or rent paid in advance for the coming quarter
- Short-term investments you plan to sell within 12 months
What are fixed assets?
Fixed assets (aset tetap) are long-term resources your business owns and uses for more than 12 months. You buy them to help run the business, and you keep them for years.
On financial reports, fixed assets are also called property, plant and equipment. In Indonesia, the accounting standard for fixed assets is PSAK 216, which IAI renumbered from PSAK 16 effective 1 January 2024.
Most fixed assets are depreciated over their useful life, which spreads the cost across several financial years. For example, the cost of a delivery van you’ll drive for 8 years is spread across those 8 years instead of landing in one year.
Examples of fixed assets
Here are common examples for Indonesian small businesses:
- Vehicles, such as a delivery truck or company car
- Equipment and machinery you use to make products or deliver services
- Office furniture and computer hardware
- Land and buildings your business owns
Key differences between current and fixed assets
The main difference between current vs fixed assets is how long you keep them. Current assets turn over within 12 months, while fixed assets stay in the business for years. That timeline shapes how each one is reported and taxed.
Liquidity
Current assets are highly liquid, so you can turn them into cash quickly. Fixed assets take longer to sell, and you may get back less than you paid. That’s why lenders focus on current assets when they check your current ratio.
Usage timeline
A laptop you’ll use for 3 years is a fixed asset. A stock of printer paper and ink you’ll use up within the month counts as current.
Depreciation
Fixed assets are depreciated each year to reflect wear and tear as you use them. Current assets skip depreciation because you use or convert them before wear becomes a factor.
Financial reporting
Each type has its own section of your balance sheet. Current assets appear first, in order of liquidity, and fixed assets appear under non-current assets.
Purpose in business operations
Current assets fuel your cash cycle: you buy stock, sell it, collect payment and repeat. Fixed assets are the infrastructure behind that cycle, like the delivery van that carries the stock to customers.
Other types of assets to know
Beyond current vs fixed assets, your balance sheet can hold other non-current assets too. The two you’re most likely to see are:
- long-term investments, such as shares or bonds you plan to hold for more than 12 months
- intangible assets, such as patents or software licences you use for more than 12 months
Intangible assets are amortised, which works like depreciation. You spread the cost over the asset’s useful life.
How current and fixed assets appear on financial statements
Current and fixed assets show up in two of your main financial statements. Private entities without public accountability prepare these under the Financial Accounting Standards for Private Entities (SAK EP) from 2025.
SAK EP replaces the Financial Accounting Standards for Entities without Public Accountability (SAK ETAP). Micro and small businesses can use the simpler Financial Accounting Standards for Micro, Small and Medium Entities (SAK EMKM).
Balance sheet
Your balance sheet lists your assets, liabilities and owner’s equity at a single point in time. Current assets come first in order of liquidity: cash, then accounts receivable, inventory and prepaid expenses.
Fixed assets appear below at cost minus accumulated depreciation. For example, if you bought equipment for Rp100,000,000 and have recorded Rp30,000,000 in depreciation so far, it appears on your balance sheet at Rp70,000,000.
Income statement
Your income statement, also called a profit and loss statement, shows your revenue and expenses over a period. Current assets affect it through cost of goods sold when you sell inventory, which reduces your gross profit.
Fixed assets affect it through depreciation expense, which reduces your profit a little each year. For tax, your deduction follows the government’s depreciation rules instead of your accounting records.
How fixed assets are depreciated for tax in Indonesia
For tax, Minister of Finance Regulation (PMK) 72/2023 sorts tangible fixed assets into groups, each with a set useful life. Under the regulation, you depreciate:
- group 1 non-building assets over 4 years
- group 2 non-building assets over 8 years
- group 3 non-building assets over 16 years
- group 4 non-building assets over 20 years
- permanent buildings over 20 years
- non-permanent buildings over 10 years
Land is generally excluded from tax depreciation. Tax (fiscal) depreciation can differ from the book depreciation you record under your accounting standard, so reconcile the two each year.
A tax adviser can confirm which group each asset belongs to. This is worth doing before you buy large equipment, because the group sets how quickly you can claim the cost.
Why classifying assets correctly matters
Sorting current vs fixed assets correctly shapes your tax deductions and how you plan your cash. Getting it right helps you:
- report accurately, so lenders and investors see a true picture of your financial position
- claim the correct deduction each year under the depreciation groups the Directorate General of Taxes (DJP) applies
- plan spending with a clear view of how much of what you own is liquid
- spot common mistakes, such as recording a long-life purchase like a laptop as an everyday expense
- prepare for audits and reviews, and submit your annual tax return (SPT Tahunan) with confidence
Track your business assets with Xero
When your assets are classified correctly from the start, tax time and big purchase decisions get easier. Cloud accounting software helps you track depreciation and pull up your balance sheet whenever you need it.
With Xero, you can record and manage your business assets in one place. Reconcile bank transactions daily and see your cash flow in real time, then try Xero and get one month free.
FAQs on current and fixed assets
Here are quick answers to common questions about current and fixed assets.
Is a car a fixed asset or a current asset?
A car is a fixed asset when your business owns it and uses it for more than 12 months. For a car dealer, cars on the lot waiting to be sold are inventory, so they’re current assets.
Is inventory a current or fixed asset?
Inventory is a current asset because you hold it to sell. It stays current even if it takes longer than 12 months to sell, as long as it’s sold within your normal operating cycle.
What is the difference between fixed assets and non-current assets?
Fixed assets are one category within non-current assets, which is the broader group. Non-current assets also include goodwill and long-term investments, which your balance sheet can list on separate lines.
Which fixed assets can’t be depreciated?
Land generally can’t be depreciated because it doesn’t wear out, and PSAK 216 generally treats it as having an unlimited useful life. A building on that land still depreciates, so record the land and the building as separate assets.
Can an asset change from fixed to current?
Yes, if you decide to sell a fixed asset and expect to sell it within 12 months, it’s usually reclassified as held for sale. It then sits apart from the fixed assets you’re still using.
How do you determine whether something is a current or fixed asset?
Ask whether you’ll turn it into cash or use it up within 12 months, or whether you bought it to resell. If the answer to both is no and you’ll use it to run the business for longer, it’s a fixed asset.
Related terms
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Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.