An asset, which is either cash or convertible into cash within a short period of time, not exceeding one year or the operating cycle of the business, without much loss of value.
- convertible: we are talking about its liquidity
- without much loss of value: You won’t buy a building now, but if it is sold to you at Rs. 10, you will jump. But, that is loss of value.
NOTE
In case of warships, ship building. The operating cycle will be larger than the usual businesses (more than an year) so in that case the definition of the current assets will be considered accordingly.