No, construction works-in-progress are not current assets. A current asset is any asset that will provide an economic benefit for or within one year. A construction work-in-progress is recorded in a company’s balance sheet as a part of the PP&E, or property, plants, and equipment account. PP&E has a useful life of longer than one year, so construction works-in-progress and other PP&E costs are considered non-current assets.
Are Construction Works-In-Progress a Current Asset FAQs
What is a current asset?
A current asset is an asset that will provide economic value within 1 year, whereas a fixed asset is a long-term asset that will provide economic value beyond 1 year.
Are contruction works-in-progress a current asset?
No, construction works-in-progress are not current assets.
What type of asset is a construction work-in-progress?
A construction work-in-progress is recorded in a company’s balance sheet as a part of the PP&E, or property, plants, and equipment account.
What is the difference between a current asset and a fixed asset?
Fixed assets have a much longer lifespan than current assets, which are only ever short-term.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.