What are Other Assets?
Other assets is a financial category that contains things that are valuable but too small or random to have their own category. This category may be found in a wide range of places, from the company’s own books to submitted tax information. The contents of this category are often a single item of value or a wide range of items that have very little individual value, but a lot when combined. Most companies are cautious when the total of other assets becomes very high, as that can look like they are hiding money.
When keeping track of a company’s assets, most financial departments will break them down into smaller groups. For instance, a small company may have a section of its books dedicated to a company car, the cost of the car, gas, depreciation, etc. This section would contain all of the relevant financial information for everything related to owning the car and driving it. A larger company may have a similar thing broken down even further, such as a category for repairs, one for gas and so on.
When all of the company’s major assets are accounted for, it isn’t uncommon for a few things to be left out. These assets have value, but they don’t fit nicely into any other grouping. For example, a taxi company would have very detailed financial records for its cars, but if it had a single valuable painting in the office, it would be difficult to shoehorn it into any preexisting category. The painting, and any other oddball item, would fall into other assets.
In addition to single valuable items, other assets will contain large quantities of items that combine to have value. These items, such as depreciated furniture or scrap materials, have little to no value on their own. If a company has enough of these items, their total value may be enough to mention. Rather than muddy up other categories with the extraneous items, they are just dumped in the other assets list.
Many companies are careful about using the other assets classification. This designation is an easy way to hide assets that a company may not want to disclose. As a result, large or unexplained values in this category often raise red flags when people examine the company’s financial history. In order to keep this from happening, many companies break down the other assets category into an itemized list similar to other major categories, except the contents are generally very random.
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