Canadian companies use a 12-month period to distinguish between items that are current from those that are non-current.

Question

Quizplus · Accepted Answer

It is true that Canadian companies use a 12-month period to distinguish between current and non-current items in their financial statements. This period is called the operating cycle and is used to classify assets and liabilities as either current (those expected to be used or paid within the next 12 months) or non-current (those expected to be used or paid beyond the next 12 months). This helps investors and analysts understand a company's liquidity and long-term financial health.

Canadian Companies Use a 12-Month Period to Distinguish Between Items