# Current Assets

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### What are Current Assets in Model Reef

Current Assets typically include:

* **Cash**
  * Calculated from the Cashflow Statement.
  * Never entered directly except as an opening balance.
* **Accounts Receivable (AR)**
  * Amounts owed by customers due to revenue delays.
* **Other short term receivables or prepayments**
  * If modelled explicitly with Asset type variables and short term categories.

Exact line labels depend on your category design, but the behaviour is consistent.
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### How Accounts Receivable is generated

Accounts Receivable comes from **Revenue variables** with payment delays.

Rules:

* Revenue accrues in the P\&L when it is earned.
* If a delay or payment term is applied, cash is collected later than accrual.
* The difference between cumulative revenue and cumulative cash receipts becomes the AR balance.
* When cash is collected, AR decreases and cash increases.

You do not need to calculate AR manually. The engine derives it from revenue and cash timing.
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### Cash as a derived asset

Cash is always a **derived** balance in Model Reef.

For each period:

{% code title="Closing cash formula" %}

```
Closing Cash = Opening Cash + Net cashflow
```

{% endcode %}

Where Net cashflow is taken from the Cashflow Statement, which itself is generated from all variable cash movements.

You typically specify an opening cash balance once, then allow the model to compute future cash levels.
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### Current Assets and working capital

Current Assets, particularly AR and any other short term items, are a core part of **working capital**.

* An increase in AR reduces cash relative to revenue.
* A decrease in AR increases cash as customers catch up on payments.

In the Cash Waterfall, the **Change in net working capital** line summarises movements in AR together with Accounts Payable and other timing related balances.
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{% step %}

### Current Assets in scenarios and branches

In scenarios:

* Revenue patterns and delays can change, leading to different AR and cash trajectories.
* You can test the impact of slower or faster collections on liquidity.

Across branches:

* Each branch has its own AR and cash components.
* Consolidated Current Assets are the sum across enabled branches, giving group level visibility.
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## Related articles

* [Retainer & Project Pipeline Forecast](/use-cases/media-agencies-and-creative-studios/retainer-and-project-pipeline-forecast.md)
* [Build a Machine Readable Model for Automation](/how-tos/data-workflows-and-automation/build-a-machine-readable-model-for-automation.md)
* [Non Current Assets](/help/financial-outputs-and-valuation/non-current-assets.md)
* [Cloning Scenarios](/syntax/scenario-syntax/cloning-scenarios.md)


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