Difference between current and fixed assets
Current assets vs fixed assets (comparison)
Current assets are the assets that a business owns and expects to use or turn into cash within a year while fixed assets are resources for long term use.
Both current and fixed assets are reported on the balance sheet with fixed assets often listed as property, plant and equipment (PPE).
Examples of current assets
Current assets include cash and cash equivalents, inventory, accounts receivable, prepaid expenses (your annual insurance policy, for example) and short-term investments. Cash equivalents are assets that can be sold for a known amount of money at short notice. Short-term investments are those that will provide a return within a year, such as a bond with a maturity of less than a year.
Examples of fixed assets
Fixed assets can include buildings, computer equipment, software, furniture, land, vehicles and machinery owned by the business.
See related terms
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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.