Non-Operating Asset
What is a Non-Operating Asset?
A non-operating asset is an asset that generates income, but is unrelated to the core operations of the company.
How Does a Non-Operating Asset Work?
Also called a redundant asset, a non-operating asset usually generates some form of revenue or return for the owning company, but play no role in the company's operations.
For example, if a company used to manufacture plastic model kits but later moved into manufacturing plush children's toys, the dyes used to create the parts for the model kits would be considered non-operating assets because they are not used in the production of plush toys.
A company's asset portfolio is also an example of a non-operating asset (except in the case of an investment company or mutual fund).
Why Does a Non-Operating Asset Matter?
Companies must report non-operating assets on their balance sheet in order to reflect a complete financial picture. Non-operating assets are excluded in most analyses of growth and revenue projections since they are unrelated to a company's main production capabilities.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.