Distinguish between order of liquidity and order of permanence?
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Permanence can be understood as the inverse of liquidity. Though it is not a requirement that a less liquid asset should have greater permanence, this idea holds in most cases. Thus, the Order of permanence is considered to be the reverse of the Order of Liquidity.
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Order of permanency is that where the assets and liabilities are shown as per theirpermanency in the business. For example, in assets side, fixed assets are show first staring from Goodwill, Land & Building, Plant & Machinery , Furniture and Fixtures and then current assets.
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