The characteristics of short-term investment are: (1) easy to realize. Short-term investment is a temporary storage form of cash, and its liquidity is second only to cash, so it has strong liquidity. When the cash of an enterprise is temporarily surplus, choosing the most liquid securities for investment is the best way to manage money. When the cash of an enterprise is insufficient to pay, it can be immediately converted into cash.
(2) The heat preservation time is short. As a short-term investment, it is usually not for long-term holding, nor for long-term purposes such as controlling another enterprise or exerting significant influence on another enterprise. Short-term investments are planned to be sold in a short time to be converted into cash. The "short-term sale" here does not mean that it must be sold within one year. Although the definition of short-term investment is that the holding time will not exceed 65,438+0 years, it is a general standard to distinguish short-term and long-term investments, not an absolute standard. In some cases, short-term investment is a cash reserve used to deal with major contingencies or accidents. When this event did not happen, no cash reserve was needed for payment. At this time, the holding time of short-term investment may exceed 1 year. It doesn't matter whether the short-term investment is held for more than 1 year, as long as it is to store surplus cash. Short-term investment required for business, even if it is held for more than 1 year, is also a short-term investment.
(3) Investment not aimed at controlling the invested entity, etc. Short-term investment usually does not focus on controlling the investee, exerting significant influence on the investee or improving trade relations. If an enterprise invests in order to control the investee, exert significant influence on the investee, or improve trade relations, it will usually not be sold in the near future. If it is sold, it will be impossible to control or exert significant influence on the invested unit, and the established trade relations will be interrupted.
As a short-term investment, two conditions must be met: (1) it can be traded in the open market and has a clear market price. For example, all kinds of listed stocks and bonds usually have a clear market price; (2) Holding investment as the deposit form of surplus funds to maintain its liquidity and profitability depends on the intention of the management authorities. Investments that do not meet the above conditions are regarded as long-term investments.