How does IFRS define 'current assets'?

The definition of 'current assets' under IFRS emphasizes that these are assets expected to be realized or sold within 12 months from the reporting date. This includes items such as cash, inventory, and accounts receivable, which are expected to be converted to cash or consumed in that timeframe. The classification of assets into current and non-current is crucial for providing a clear picture of a company’s liquidity and operational efficiency.

By identifying which assets are expected to contribute to cash flow in the short term, stakeholders can better understand the company’s ability to meet its short-term obligations. Overall, this classification supports informed decision-making for investors and creditors regarding the financial health of the enterprise.

The other options do not align with IFRS definitions of current assets, as they either imply longer timeframes, apply to assets that are not specifically intended to be liquidated or sold within the short term, or focus on valuation rather than the operational expectation of realization within 12 months.