What is a 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.
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.
- 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!