Is a Loan a Current Asset?

Written by True Tamplin, BSc, CEPF®

Updated on January 02, 2023

A loan may or may not be a current asset depending on a few conditions. A current asset is any asset that will provide an economic value for or within one year. If a party takes out a loan, they receive cash, which is a current asset, but the loan amount is also added as a liability on the balance sheet. If a party issues a loan that will be repaid within one year, it may be a current asset. If a party issues a loan that will be repaid after one year, it is not a current asset.

Is a Loan a Current Asset FAQs

Is a loan a current asset?

A loan may or may not be a current asset depending on a few conditions.

What is a current asset?

A current asset is any asset that will provide an economic value for or within one year.

What happens on a balance sheet when a loan is taken out?

If a party takes out a loan, they receive cash, which is a current asset, but the loan amount is also added as a liability on the balance sheet.

When would a loan be considered a current asset?

If a party issues a loan that will be repaid within one year, it may be a current asset.

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.