What are 'Other Current Liabilities'

Other current liabilities is a balance sheet entry used by companies to group together current liabilities that are not assigned to common liabilities such as debt obligations or accounts payable.

Current liabilities are obligations coming due within 12 months time. Long-term liabilities are paid beyond 12 months.

BREAKING DOWN 'Other Current Liabilities'

Companies will group other current liabilities into one account on the balance sheet for the sake of simplicity. Investors should be able to find out exactly which liabilities are accounted for in the other current liabilities account by reading the attached foot or endnotes.

Purpose of Other Current Liabilities

Other current liabilities is a catch-all basket to account for liabilities that do not receive a specific line item on a company’s balance. To keep a balance from swelling to many lines, they can be grouped and include aggregate in the other current liabilities entry. Liabilities that deserve more transparency often get their own line item on a balance sheet, for those that are not essential to core operations can be grouped and expanded on in the footnotes to financial statements. If every liability was listed line item by line item, the balance sheet could balloon to multiple pages and become less useful.

Although much of the detail behind the composition of other current liabilities are included in footnotes to the balance sheet, it should not be confused with off-balance sheet financing activities. Because off-balance sheet financing adds the potential for accounting manipulations, these entries in the footnotes are often subject to scrutiny. Other current liabilities is standard practice and does not rise to the level of review often seen with off-balance sheet items.

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