Cuurent and non current assets

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bibekananda pani (Querist)
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11 May 2012 kindly define current and noncurrent assets/ inventory in accordance to the revised requirement of the sch vi of the company act

bibek

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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11 May 2012 Dear Mr. Bibek,

An asset shall be classified as current when it satisfies any of the
following criteria:-
(a) it is expected to be realized in, or is intended for sale or consumption
in, the company’s normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is expected to be realized within twelve months after the reporting
date; or
(d) it is Cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months after
the reporting date.
All other assets shall be classified as non-current.”

Accrodingly, If you expect to consume or sale the inventory in normal operating cycle of your company then it would be classified as current asset.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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11 May 2012 Further the inventory is held primarily for the purpose of being traded.

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