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    Meggido's Avatar
    Meggido Posts: 1, Reputation: 1
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    #1

    Mar 19, 2016, 04:00 AM
    Question about investment
    If an investment is already classified as a long term investment, is it legal to convert it to a short term investment to improve current ratio?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Mar 20, 2016, 09:53 PM
    You cannot be opportinistic, it is actually fraud to distort the financial statements to present a position that is not factual. The way to convert a long term investment to a current asset is to cash in the investment and reinvest in a short term asset i.e. cash in long term notes and invest in an interest bearing deposit maturing within one year.

    A long term asset is an asset that has a maturity date beyond one year, a short term asset is an asset that has a maturity date within one year

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