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Definitions from ASC Master Glossary
Current Assets: Current assets is used to designate cash and other assets or resources commonly identified as those that are reasonably expected to be realized in cash or sold or consumed during the normal operating cycle of the business.
Current Liabilities: Current liabilities is used principally to designate obligations whose liquidation is reasonably expected to require the use of existing resources properly classifiable as current assets, or the creation of other current liabilities.
Definition from ASC Master Glossary
Operating Cycle: The average time intervening between the acquisition of materials or services and the final cash realization constitutes an operating cycle.
Operating cycle of the business |
Operating cycle for determining current classification |
Less than one year |
One year |
Longer than one year (such as a tobacco, distillery, or lumber business) |
Same as the business’ operating cycle (i.e., the longer time period) |
Not clearly defined |
One year |
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