Learn in the textbookClassification of Assets and Liabilities
DefinitionCurrent assets (流動資産) are the asset category that groups items in the flow of core business transactions and items that will turn into cash within one year of the balance sheet date.
ExplanationTypical examples are cash and deposits (現金預金), accounts receivable (売掛金), the right to collect payment later for goods already sold, and inventories (棚卸資産) such as merchandise held for sale. These change form as they move through the core business cycle of buying, selling and collecting payment, and end up as cash again. Assets outside that cycle are sorted by whether they turn into cash within one year of the balance sheet date, an approach called the one-year rule (1年基準).
AnalogyLike a greengrocer who uses the day's takings to buy vegetables, which then sell and become money again, this is property that keeps circulating through the shop.