What is the reason behind treating "prepaid expenses" as current asset?
As the current asset literaly means those assets which can be converted into cash or cash equivalent,but the prepaid expenses are the assets which cannot be realised at all.
Paban Kumar (Student) (67 Points)
08 January 2018What is the reason behind treating "prepaid expenses" as current asset?
As the current asset literaly means those assets which can be converted into cash or cash equivalent,but the prepaid expenses are the assets which cannot be realised at all.
satish
(teaching)
(2046 Points)
Replied 09 January 2018
for example: loss on issue of debentures also can't be convertible into cash. we are disclosing under other non current assets.
like above all asset need not be convert into cash and cash equivalents. some of the item by the nature of account balances, we need to disclose.
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