This refers to the type of assets that can easily be converted into money or cash equivalents (mostly within a year). Alternatively, this concept can also classify assets into short-term and long-term assets. When you classify assets basing on their Convertibility into cash, you classify them as either current assets or fixed assets. Usage: This is the classification of assets basing on their use in a business operation.Ĭlassification of Assets According to Convertibility.Convertibility: Assets are classified based on how easy they are to be converted into cash.An investment can be tangible or intangible.
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