Other Current Assets (OCA)

What Are Other Current Assets (OCA)?

Other current assets (OCA) is a category of things of value that a company possesses, benefits from, or utilizations to create income that can be changed over into cash inside one business cycle. They are alluded to as "other" in light of the fact that they are uncommon or irrelevant, unlike regular current asset things like cash, securities, accounts receivable, inventory, and prepaid expenses.

The OCA account is listed on the balance sheet and is a part of a firm's total assets.

Figuring out Other Current Assets (OCA)

Assets are broken down on the balance sheet as either fixed assets or current assets. Fixed assets are normally long-term unmistakable bits of property, like structures, computer equipment, land, and machinery, that a firm possesses and involves in its operations to produce income. They have helpful lives that span north of a year and are not liquid.

Current assets, then again, are the assets of a company that are expected to be helpfully sold, consumed, used, or exhausted through standard business operations. They can without much of a stretch be liquidated for cash, normally in no less than one year, and are thought about while computing a firm's ability to pay short-term liabilities. Instances of current assets incorporate endlessly cash equivalents (CCE), marketable securities, accounts receivable, inventory, and prepaid expenses.

Current assets that are uncommon won't fall into one of the defined categories listed previously. All things considered, these assets will be lumped together into a generic "other" category and recognized as other current assets (OCA) on the balance sheet.

Now and then, one-off situations, made sense of in a company's 10-K filings, will bring about perceiving other current assets (OCA). Since these assets are rarely recorded, or are immaterial, the net balance in the OCA account is regularly quite small. Instances of other current assets (OCA) include:

• Advances paid to employees or providers
• A piece of property that is being prepared available to be purchased
• Restricted cash or ventures
• Cash surrender value of life insurance approaches

Genuine Example of Other Current Assets (OCA)

For the quarter ending March 31, 2019, Microsoft Corp. (MSFT) recorded total assets of $263.28 billion on its balance sheet. Of this total, 61% were credited to current assets. As you can find in the table above, other current assets (OCA) made up a small extent of the $159.89 billion of current assets. They were listed at $7.05 billion, meaning they accounted for just 4% of the company's liquid assets.

Special Considerations

Microsoft didn't give a clearer breakdown of its other current assets (OCA) in its most recent 10-Q and 10-K statements. Since they address a limited source of liquidity for a company and might not essentially affect a business' overall financial situation, not adding more itemized information on them is common.

At the point when other current assets (OCA) are examined, information will be given in the footnotes to the financial statements. Clarifications might be important, for instance, when there is a notable change in other current assets (OCA) starting with one period then onto the next.

Other current assets (OCA) are expected to be arranged in no less than a year or to mature into another form. In this way, the value of a company's other current assets (OCA) may fluctuate enormously from one year to another, depending on the wellbeing of the company and how it spends its money.

It is valuable to determine how material these assets are, as they might distort a firm's liquidity.

Assuming the funds in OCA develop to a material amount, it might incorporate at least one assets that would should be renamed into at least one of the major defined current assets accounts. In effect, when funds in OCA develop to a critical level, the account becomes sufficiently important to be listed separately and added to one of the major current accounts on the balance sheet. This gives understanding to anybody assessing the company's balance sheet since the idea of the recorded things will be better perceived.

Features

• Other current assets are liquid assets that are portrayed as uncommon or irrelevant.
• Since these assets are recorded rarely, or are irrelevant, the net balance in the OCA account is regularly quite small.
• They are listed on the balance sheet alongside different assets and are convertible into cash in one year or less.