Permanent Current Asset

Definition of 'Permanent Current Asset'


The minimum amount of current assets a company needs to continue operations. Permanent current assets are current assets that are always replaced with like assets within one year. Inventory, depreciating assets, cash and accounts receivable are examples of this. These are the amount of current assets for the company to exist.

Investopedia explains 'Permanent Current Asset'


There are temporary and permanent current assets. A temporary current asset is a sudden increase in the accounts receivable and inventory due to a sudden increase in sales, such as with a fluctuating asset. A company growing over time has three types of assets: fixed assets, permanent current assets and fluctuating current assets. Fixed assets are long term. Fluctuating current assets are seasonal and occur when sales increase or decrease. Permanent current assets are always financed long-term similar to fixed assets.



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