Other Current Assets (OCA)

Other Current Assets (OCA)

What are Other Current Assets?

Other current assets (OCA) are miscellaneous, short-term assets a company expects to convert into cash or use within one operating cycle (typically one year) but that don’t fit the standard current-asset categories such as cash, marketable securities, accounts receivable, inventory, or prepaid expenses. Because they are uncommon or individually small, companies group them under a single “other” line item on the balance sheet.

Key points

• OCA are current (short-term) and generally liquid or expected to become liquid within a year.
• They are grouped together because they are uncommon, immaterial, or one-off items.
• The balance in OCA is typically small, but it can fluctuate significantly from period to period.
• Material increases should be explained in the financial statement footnotes or reclassified into specific current-asset accounts.

Common examples

• Advances to employees or suppliers
• A parcel of property being prepared for sale
• Restricted cash or short-term restricted investments
• Cash surrender value of life insurance policies
• Short-term deposits or receivables that don’t fit other categories

Where to find details

Companies often provide explanations of significant components of OCA in the footnotes to their financial statements (10-Qs and 10-Ks). If OCA changes materially from one period to the next, the footnotes should disclose the reasons.

Why OCA matters to analysts

• Liquidity impact: Because OCA are included in current assets, unexpected or unexplained growth in OCA can distort liquidity ratios (e.g., current ratio, quick ratio). Analysts should determine whether items in OCA are truly liquid.
• Materiality and classification: If OCA grows large enough, its components may warrant separate line items or reclassification into standard current-asset accounts to provide clearer information about a company’s liquidity and operations.
• Variability: OCA balances can vary widely year to year depending on one-off transactions or how a company manages short-term resources.

Brief illustration

Large firms sometimes report several billion dollars in OCA that still represent a small percentage of total current assets. Because companies rarely break out every OCA component in the primary statements, analysts must rely on footnotes to understand the composition and assess its relevance to liquidity.

Bottom line

Other current assets are a catch-all for short-term, uncommon, or immaterial assets. They are usually not material, but when they are, their composition and changes should be disclosed and reviewed to accurately assess a company’s short-term financial position.