Which type of assets are expected to be converted into cash within the next 12 months?

Current assets are those expected to be converted into cash within the next 12 months. This classification includes cash and cash equivalents, accounts receivable, inventory, and other short-term financial assets. The primary characteristic of current assets is their liquidity; they are readily available to meet short-term obligations and support ongoing operations.

In contrast, noncurrent assets are not intended to be converted to cash within a year and typically include long-term investments, property, plant, and equipment. Fixed assets, which fall under the noncurrent category, represent long-term tangible assets used in the production of goods and services. Intangible assets are also classified as noncurrent; they include non-physical items like patents and trademarks that provide value over time but are not quickly convertible into cash.

Therefore, current assets are clearly distinguished by their expected liquidity, making them essential for short-term financial planning and stability.