What are Other Current Assets?

Other Current Assets

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Other Current Assets

Other current assets (OCA) refer to a category of assets that are expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer, but don’t fit into the common types of current assets.

Common types of current assets include:

When an asset doesn’t fit into one of these common categories but is still expected to provide economic benefit in the short term, it’s often listed as an other current asset. Examples of other current assets might include:

  • Tax refunds: If a company has overpaid its taxes and is due for a refund within the next year, that refund could be listed as an other current asset.
  • Short-term loans to employees: If a company has given a short-term loan to an employee and expects to be paid back within a year, that loan could be listed as an other current asset.
  • Advances to suppliers: If a company has paid a supplier in advance for goods or services to be received within the next year, that advance could be listed as an other current asset.
  • Other receivables: This may include amounts due from employees, insurance claims, or deposits.

The value and composition of other current assets can vary significantly from company to company, depending on the nature of the company’s operations and industry practices. Therefore, it’s important to look at the notes to the financial statements for a more detailed understanding of what a company’s other current assets include.

Example of Other Current Assets

Let’s consider an example to understand how Other Current Assets (OCA) would appear on a company’s balance sheet.

Let’s say we have a company named XYZ Corp. and here’s a simplified version of its balance sheet:

XYZ Corp.
Balance Sheet
As of December 31, 2023
Current AssetsAmount (in USD)
Cash and Cash Equivalents$100,000
Accounts Receivable$200,000
Prepaid Expenses$50,000
Other Current Assets
Short-term loans to employees$10,000
Advance to suppliers$20,000
Total Other Current Assets$30,000
Total Current Assets$530,000

In this example, XYZ Corp.’s Other Current Assets are $30,000, which consist of short-term loans to employees of $10,000 and advances to suppliers of $20,000. These assets are expected to be converted into cash within one year and are hence classified as current assets. They are not standard categories like cash, accounts receivable, inventory, or prepaid expenses, and thus are listed separately as Other Current Assets.

When you sum up all the categories of current assets, you get Total Current Assets of $530,000. These figures help analysts and potential investors understand the company’s short-term financial health and liquidity.

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