Financial Assets - Current
A group, no postings. It totals investments you expect to cash in within a year, through Short-term Investments, on the Balance Sheet.
In detail
Financial Assets - Current, numbered 1250, is the group that totals investments the company expects to turn into cash within the next twelve months. In the standard chart it has one child, Short-term Investments, for fixed deposits, treasury bills and shares held for less than a year. It sits apart from Cash and cash equivalents because a six-month deposit cannot be spent tomorrow, yet apart from the non-current group because it will be cash this year, so a lender reading the Balance Sheet sees the right picture of liquidity. When a long-term deposit under Financial Assets - Non-Current comes within a year of maturity, it is moved here by Journal Entry. Only the child takes postings.
Formula
Financial Assets - Current = Short-term Investments (deposits and holdings maturing within twelve months).
How to record it in BRAccount
- 01Go to Accounts Setup > Chart of Accounts and expand Assets > Current Assets > Financial Assets - Current.
- 02Read the child Short-term Investments and add others only if you need to split deposit types.
- 03Open Financial Reports > Balance Sheet; the group shows the deposits maturing this year.
- 04Post new deposits to Short-term Investments by Payment Entry, never to the group.
- 05At year end, move any long-term deposit maturing within twelve months into the child by Journal Entry.
When to use it
Do not post here. Use Short-term Investments for fixed deposits and shares held under twelve months.
Example from the demo books
A six-month fixed deposit of Rs 5,00,000 appears under Financial Assets - Current.