Are prepayments non current assets?

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Macpherson 0 Comments

Are all prepayments current assets or to be more specific, do you know if there are any kind of prepayments that can be included as a non current asset?

1 Answer

score 0 · Answer 1 · 2012-12-02T21:43:45+00:00

Most of the times, prepayments are current assets because they are expected to be realized within twelve months. There can however be non current liability if they are expected to bring economic benefit after more than twelve months. If you have prepaid rent for 3 years, then one year will be a current asset and two years will be a non current asset.