Circulante

Circulante is a term used in accounting and finance, particularly in Portuguese-speaking jurisdictions, to designate assets and liabilities that are expected to be realized, sold, or settled within the entity's normal operating cycle or within twelve months after the end of the reporting period.

The circulante is subdivided into two groups on the balance sheet: ativo circulante (current assets) and passivo circulante (current liabilities). Ativo circulante includes items that are readily convertible into cash or used up in the short term, such as cash and cash equivalents, marketable securities, accounts receivable, inventories, and prepaid expenses. Passivo circulante includes obligations due within the same horizon, such as accounts payable, short-term borrowings, taxes payable, accrued expenses, and provisions expected to mature within one year.

The concept is central to liquidity analysis. The balance between circulating assets and circulating liabilities provides a measure of working capital and current ratio, informing short-term solvency and operational liquidity. In financial reporting, non-circulante (long-term) assets and liabilities are separated from circulante to reflect the company's longer horizon.

In practice, classification follows accounting standards such as IFRS or the Brazilian CPC, which generally define circulante based on the timeframe of realization or settlement, with exceptions for entities whose operating cycles exceed twelve months. Circulating items are typically listed in order of liquidity and near-term obligations by due date.