The composition of current assets

The composition of current assets

Pretty much interested in the concept, structure and composition of current assets.Because, having an idea about all this is much easier to navigate in the financial statements.And if you want to learn more about what are the current assets, from which they are made and that they are treated, the information given below will be very useful to you.

What is working capital

Working capital of the enterprise - this is money (assets), which had been advanced in the circulating capital.It is important to note that they are resumed with some regularity (depending on the activity and production capacity) and thereby provide a successful enterprise.At the same time the essence of working capital is always determined solely by their economic role as well as the need to ensure the reproduction process, which includes not only the production process but also the process of treatment.

As part of the working capital

In terms of composition, current assets are divided into two very important components:

  • funds treatment;
  • revolving funds.

Fondoobraschenie represents the funds related to the servicing process of treatment of manufactured products.

These include:

  • products manufactured, stored directly in the warehouse of the enterprise;
  • finished goods in transit;
  • finished products, shipment of which has already been made to suppliers and customers;
  • cash for the products listed in the checking account customers, as well as being on hand of the enterprise;
  • receivables.

All of this is included in the circulation it funds, but because of the current assets include also the revolving funds, they should also be considered in more detail.They are the objects of labor, for which the period of service is less than 1 year and are involved in the pricing of manufactured products in the enterprise and transfer their value to it in its entirety.

These include:

  • inventories, including materials, purchased semi-finished products, raw materials, energy and fuel;
  • WIP (semi-finished products made directly on the equipment and of its raw materials);
  • prepaid expenses (not too real elements of revolving funds, which include the costs of processing and the development of a new batch of products, which is manufactured in this period (quarter or year), but they are the products of the future period).

As for the structure of current assets, it is diverse, but it always shows the share of the individual elements in the total amount of funds.It depends on what industry the company carried out its activities as well as on other factors, we list some of them:

  • quality of finished products;
  • the specifics of the enterprise;
  • accelerating scientific and technological progress and the other;
  • level of concentration, cooperation, specialization and integration of production.

As can be seen, the composition and structure of current assets are very diverse.But knowing what they are, and will include, you will be able to better understand the accounting records and statements, and you do not have to ask for it to explain to you other people.