Is building a current asset?

No, the building is not a current asset.

Explanation

Current assets are those in a business that is reasonably expected to be sold, consumed, cashed, or exhausted within one year of accounting through normal day-to-day business operations.

Examples: Cash and cash equivalent, stock, liquid assets, etc.

The building is expected to have a valuable life for more than a year and is bought for a longer term by a company. The building is a fixed asset/non-current asset, those assets which are bought by the company for a long term and aren’t supposed to be consumed within just one accounting year.

In order to understand it more clearly, let’s see the two types of assets in the classification of the assets on the basis of convertibility:

In the classification of the assets on the basis of their convertibility, they are classified either as current assets or fixed assets. Also referred to as current assets/ non-current assets or short-term/ long-term assets.

• Current Assets – As explained above, those assets in a business that is reasonably expected to be sold, consumed, cashed, or exhausted within one year of accounting.
• Fixed Assets – Those assets which are not likely to be converted into cash quickly and are bought by the business for a long term.

Building in the balance sheet

Let us take a look at the balance sheet’s asset side and see where building and current assets are shown

Balance Sheet (for the year ending…)

As we can see, the building is shown on the long-term assets side and not in the current assets.

Therefore, the building is not a current asset.