Examples of Other Current Assets. At times there is lack of clarity as not all companies give a breakdown of what has been recorded under the section of the assets and just put a single total amount. Other Current Assets Category Archives. In general terms, assets (or disposal groups) held for sale are not depreciated, are measured at the lower of carrying amount and fair value less costs to sell, and are presented separately in the statement of financial position. It is anyways a part of current assets and thus possess a high level of liquidity too. Noncurrent assets such as real estate properties and manufacturing plants are tangible or fixed physical assets that … Long term assets are non-current assets such as plant and machinery, buildings, land, long term investments. Uses of Current Assets: Current Assets can be used as clear regular payments and bills. The term net assets comes from the accounting equation. To compute the asset, we need to exclude the cash, cash equivalents, accounts receivables, marketable securities, inventory, and prepaid expenses from the total asset. Examples of Noncurrent Assets . A company can have a piece of land or property that the company is planning to sell and making the required formalities ready. Current assets. The value at times will be so insignificant that it is a waste of time for auditors to dig into such tiny figures. This is a guide to Other Current Assets. Inventory – $80,000. Total Current Assets – $300,000. As you can see, the assets of a company are equal to the liabilities and owners’ equity. The difference between current assets and current liabilities is called Working Capital. These are also listed on the balance sheet and together with the assets type form a part of the total assets of the company. Here we also discuss the introduction to Other Current Assets along with examples, advantages and disadvantages. An advance which has been provided to a need employee during his time of personal emergency can be a part of the asset. Prepaid Insurance 10. Current Assets Formula. It can make sense to focus an accounting procedure on the periodic investigation of this account, to see if any items should no longer be recorded as assets. and Example of liabilities- … A brief about Current Assets; Definition of Current Assets; Types of Current Assets; Examples of Current Assets; A brief about Current Assets. Other assets are a grouping of accounts that are listed as a separate line item in the assets section of the balance sheet. © 2020 - EDUCBA. Cash Marketable Securities 5. These assets are made to record rarely and hence the net balance in the asset account will be very small. Otherwise, they may linger on the balance sheet for years, and be subject to an audit adjustment. Prepaid Expenses 11. Other non-current assets may be portions of prepaid expenses that will start expiring in more than a year after the balance sheet date and the cash surrender value of life insurance on officers. This line item contains minor assets that do not naturally fit into any of the main asset categories. Examples of natural resources include timber, fossil fuels, oil fields, and minerals. Current assets appear on a firm’s balance sheet and are the total of all the assets that can be easily converted into cash. Prepaid Expenses – $25,000. Some assets are recorded so rarely, or are so immaterial, that they are not accorded a separate "major" account within the general current assets classification. It is the difference between the tangible value of assets that you buy and the price you pay. Examples of current assets include stock, accounts receivable, bank balance, and cash in hand, etc. Current assets are the key assets that your business uses up during a 12-month period and will likely not be there the next year. Fixed assets expected useful economic life >2 years. 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Accounts included in the other current assets classification are aggregated for presentation in a single line item in the balance sheet. This $5,000 is nothing but the “other current asset” figure which we arrive by deducting the total asset from the pure asset figure. For example, you may pay a premium for a business due to its brand name or patents. Also, if some the asset such as machinery or land is being readied for sale, it gets recorded in the current asset section of the balance sheet. Since these residual accounts are current assets, their contents must be convertible into cash within one year or one business cycle. Economic Value: Assets have economic value and can be exchanged or sold. Eg motor vehicles and computers. This includes all of the money in a company’s bank account, cash registers, petty cash drawer, and any other depository. Marketable Securities – $15,000. Any amount of restricted cash or investment made by the company will reflect under the section of the asset in the balance sheet. Start Your Free Investment Banking Course, Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others. The assets must be consumed through extraction from the natural setting. Example. From an accounting perspective, this premium is … On the other hand, Current assets are short term assets which have to be paid within 12 months. If the account grows to material proportions, this may mean that it contains one or more assets that should be reclassified into "major" current assets, and be itemized separately in their own accounts. 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