What are Non-operating assets? - Definition - QuickBooks Global (2024)

FAQs

What are Non-operating assets? - Definition - QuickBooks Global? ›

Assets that aren't used to make money are called non-operating assets

Key Takeaways. Non-operating assets are assets that are not considered to be part of a company's core operations. A company's non-operating assets may be unused land, spare equipment, investment securities, and so on. Income from non-operating assets contributes to the non-operating income of a company.

Noncurrent assets are long-term and have a useful life of more than a year. Examples of current assets include cash, marketable securities, inventory, and accounts receivable. Examples of noncurrent assets include long-term investments, land, property, plant, and equipment (PP&E), and trademarks.

Goodwill is considered an intangible (or non-current) asset because it is not a physical asset like buildings or equipment.

Assets that aren't used to make money are called non-operating assets and could include things like land that isn't being used, vacant buildings, unused or outdated machinery and idle equipment.

Non-current assets may be tangible (like physical property) or intangible (like intellectual property). Key categories of non-current assets include property, plant & equipment (PP&E); investments; goodwill; and “other” intangible assets.

Key Takeaways

Noncurrent assets are a company's long-term investments that are not easily converted to cash or are not expected to become cash within an accounting year. Also known as long-term assets, their costs are allocated over the number of years the asset is used and appear on a company's balance sheet.

Operating Assets vs. Non Operating Assets: What is the Difference? Unlike operating assets, non-operating assets are not considered a core aspect of operations. Even if the asset produces income for the company, the stream is considered “side income”.

Examples of tangible assets include cash and cash equivalents, property and land, furniture, raw materials, and inventory. Intangible assets include items such as shares, copyrights, patents, and trademarks.

They appear in order of liquidity, meaning they appear in order of which can be used the quickest or easiest first. These current assets include cash, including foreign currency, cash equivalents, investments, prepaid expenses, accounts receivable, stock inventory and other liquid assets.

What is not an operating asset? ›

A non-operating asset is an asset a company owns but doesn't use in its daily operations. Some companies refer to non-operating assets as redundant assets because they may be nonessential and expendable. This means if the company needs to generate capital, it may sell a non-operating asset.

Examples of non-operating activities include: Relocating the business. Expenses caused by weather damage. Acquiring another firm.

Non-operating cash flow is comprised of the cash a company takes in and pays out that comes from sources other than its day-to-day operations. Examples of non-operating cash flow can include taking out a loan, issuing new stock, and a self-tender defense, among many others.

Examples of operating assets are cash, prepaid expenses, accounts receivable, inventory, and fixed assets. If there are recognized intangible assets, such as technology licenses needed to manufacture goods, these should also be considered operating assets.

Non-operating expense, like its name implies, is an accounting term used to describe expenses that occur outside of a company's day-to-day activities. These types of expenses include monthly charges like interest payments on debt and can also include one-time or unusual costs.