Final answer:
There is often a lower difference between the historical value and fair value of current assets than non-current assets because current assets are more liquid and their value is more closely aligned with market prices, while non-current assets are subject to factors such as depreciation and changing market conditions over a longer period.
Step-by-step explanation:
The student's question addresses why there might be a lower difference between the historical value and fair value of current assets compared to non-current assets. Current assets, such as cash and inventory, are expected to be converted into cash or used up within the operating cycle, often within a year. These assets are more liquid and are closely tied to the market prices, causing less disparity between the historical cost and the fair value.
Non-current assets, like property, plant, and equipment, are held for longer periods, and their value can deviate significantly from the historical cost due to factors like depreciation, technological advancement, and changes in market conditions. As time passes, the need for adjustments in the value of non-current assets to reflect fair value increases, so the gaps can become wider compared to those for current assets.