Are Inventories current asset or non current asset?



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Inventories current asset or non current asset?

5 Answer(s)


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Inventories typically current asset.
In some exceptional cases, some inventories could be held for very long time periods and hence could be under non-current assets

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Inventories always comes under current assets as you need to record entries for opening stock and closing stock considered to be a part of working capital.

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Generally, payment on accounts receivable is expected within one year. However, in most businesses, payment for goods sold on credit is typically received within 30-90 days of sale. This account is listed as a current asset on the company's balance sheet. - See more at: http://wiki.fool.com/Accounts_receivable#sthash.mTeVAd4A.dpuf

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Inventory in some cases be shown under non current assets.
let us take an example:
A company say X has raw materials, stores and spares ,Tools and tackles which are companies Inventories .some of this inventories have become redundant and provision for redundancy has been made for the same.

Inventories for which provision for redundancy has been made can be shown under non current assets.

we can show it as under

Note no:***

Other non current assets

Inventories
Raw material & components *****
less : provision for redundancy*****

loose tools & Equipments ******
less: Provision for redundancy******

Store & Spare Parts *****
less: Provision for redunancy *****

Total Inventory *****


** Remember:Total inventory value will be zero as we can only show that inventory under non current assets which have become completely redundant and no further use of such inventory is possible








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Inventories always comes under current asset it is a part of working capital.

https://goo.gl/3qMvFS

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