Is Furniture A Current Asset? How It Is Treated In Accounting
In business terms, furniture refers to those assets that help a business to do various activities especially these objects play an essential role in business operations.
Is Furniture A Current Asset?
No, furniture is not classified as a current asset because they are used in a business for a longer period or more than one year. These assets are depreciated over their useful life and are recorded in the balance sheet as long-term assets.
In short, furniture is not classified as a current asset because it is used in a business for a longer period typically more than a year or it is not expected to sale or converted into cash within a short period of time, so they are classified as a non-current asset or long term asset.
The furniture recorded in the balance sheet looks like this:
| Non Current Assets: | |
| Property, Plant, and Equipment | xxx |
| Land | xxx |
| Building | xxx |
| Machinery | xxx |
| Vehicles | xxx |
| Furniture | xxx |
| Intangible Assets: | xxx |
| Goodwill | xxx |
| Trademark | xxx |
| Patents | xxx |
| Long Term Investments: | xxx |
| Stocks | xxx |
| Bonds | xxx |
| Total Non Current Assets: | xxx |
Is furniture a current asset or not?
Furniture is not classified as current assets because they are depreciated over their useful life, they are not easily converted into cash, and they are bought with the vision of long-term use and not to sell within a short period.
Is furniture a current asset or a fixed asset?
Furniture is classed as fixed assets because it loses its value over its useful life.
Why furniture is treated as non-current assets in the balance sheet?
The followings are the reasons why furniture is treated as current assets:
- They are expected to use in a business for a long period
- They are depreciated over their useful life
What type of asset is furniture?
Furniture is classified as a fixed asset in the balance sheet.