What is close to cash?

"Near Cash" is a term used to describe assets that are currently not in the form of cash, but could be converted into cash in a short period of time. Assets of this type may include account balances found in a deposit that is about to achieve maturity, a balance in the funds of the money market, or even imminent rents from renting real estate. Near cash is considered to be a form of liquid asset, although these two conditions are usually used to indicate slightly different types of assets.

One of the characteristics that share in the vicinity of cash and asset of the Likvináře, is that both types of holding can be quickly converted to cash. The liquid asset will usually be in the form of some kind of asset that can be sold on the market, such a bond problem, or a piece of property with relatively small difficulties. With these assets, there may be some potential for the difference between the real value of the asset and the actual selling price, but it is usually a minimal.

close to cash is more often applied to assets that are not necessarily sold on the market, but in the near future they are eligible for converting into cash. The short -term CD is one of the examples, because once the deposit certificate gets into maturity, the investor can either decide to earn CDs and take over the balance, including accumulated interest, or reinvest on another CD or some other asset. Similarly, money market funds can usually be downloaded with relatively ease with small or no fine.

The income that is earned and accepted can also be qualified as close to cash. For example, the landlord could consider waiting for lease payments from the lessee for more or less cash asset, which will soon be in hand if the lessee pays the rent in time. For the company, the balance may be due in customer accounts for which it is expected to be settled with 30 days or cash, although the assets cannot be in the sameto use the desired time. As long as there is adequate expectation that the proceeds will soon be accepted, the income obtained from different sources may be properly considered to be cash.

One of the advantages that it is able to identify almost cash assets is that creditors will sometimes consider these resources when approval by a short -term loan. In some cases, it is possible to commit to these loans near cash assets as collateral. For the duration of the loan, the debtor cannot transfer the asset to cash without the explicit permission of the creditor, with the exception of the means of settling the balance due to the loan. If the debtor fails, it may be argued that the nearest cash asset will solve any remaining balance.