Definition of Non-operating asset:
A non-operating asset is a class of assets that are not essential to the ongoing operations of a business but may still generate income or provide a return on investment (ROI). These assets are listed on a company's balance sheet along with its operating assets, and they may or may not be broken out separately.
Investment or other asset not used in the operations of a business, but instead is meant to generate additional income (such as interest income from a fixed deposit).
Non-operating assets are also known as redundant assets because they do not support operations and are therefore considered to be redundant and expendable if a company needs to cash them in. That said, companies hold non-operating assets for several reasons. For example, a company may own a parcel of land assessed at $300,000 in value but has no plans to build on the property for at least five years. Until it is used, the land is considered to be a non-operating asset.
How to use Non-operating asset in a sentence?
- Non-operating assets can function as a way to diversify risk and revenues.
- Non-operating assets are assets that are not considered to be part of a company's core operations.
- Income from non-operating assets contributes to the non-operating income of a company. These assets and any income from them are usually omitted from the financial analysis of a company's core business.
- A company's non-operating assets may be unused land, spare equipment, investment securities, and so on.
Meaning of Non-operating asset & Non-operating asset Definition