What is a non-operating asset?

Non-Operating Asset

Dictionary Definition

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.

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.

Plain English

Examples:

• Obsolete inventory
• Personal vehicles on asset list
• Unused land
  
• Unused Equipment

Why it Matters to You

Having non-operating assets on your balance sheet skews your benchmarking data.  We can’t get a true comparison to the industry without removing those items first.  More often than not, you will find you are actually performing better once those items are removed!