What is a Redundant Asset?
How Does a Redundant Asset Work?
For example, if a company previously manufactured plastic model kits but later transitioned into manufacturing plush children's toys, the dyes used to create the parts for the model kits would be labeled redundant assets because they are not incorporated in the manufacturing of plush toys.
Why Does a Redundant Asset Matter?
Companies have to report redundant assets on their balance sheet in order to reveal their full financial picture. Redundant assets are omitted from most analyses of growth and revenue projections, because they are unrelated to a company's production capability.