Are Debt Investments Current Assets?

Written by True Tamplin, BSc, CEPF®

Updated on January 05, 2023

Yes, debt investments are typically counted as current assets for accounting purposes. A current asset is any asset that will provide an economic benefit for or within one year. Debt investments that were purchased with the intent to resell are known as “trading securities.” Because this investment strategy involves holding the security for less than one year, it is considered a short-term investment, making it a current asset.

Debt investments is different than debt financing. Debt investments are purchased with the intent to resell, whereas debt financing is used to finance projects, often lasting more than 1 year. Debt financing, often in the form of bonds, usually have a maturity date of more than 1 year and therefore would not be considered as a current asset.

Are Debt Investments Current Assets 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 debt investments current assets?

Yes, debt investments are typically counted as current assets for accounting purposes.

What are debt investments?

Debt investments are debt vehicles that are purchased with the intent to quickly resell, as opposed to holding them until maturity.

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.

About the Author

True Tamplin, BSc, CEPF®

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.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.