Nonfinancial Asset

AAA

DEFINITION of 'Nonfinancial Asset'

An asset with a physical value such as real estate, equipment, machinery, gold or oil. For example, gold is considered a nonfinancial asset because it has inherent value based on its use in jewelry, electronics, dentistry, ornamentation and historically as currency. Cash, on the other hand, is a financial asset because its value is based on what it represents. The paper the cash is printed on has very little value by itself.

INVESTOPEDIA EXPLAINS 'Nonfinancial Asset'

The value of a financial asset can be based on the value of a nonfinancial asset. For example, the value of a futures contract is based on the value of the commodities represented by that contract. Commodities, which are tangible objects with inherent value, are an example of a nonfinancial asset. Futures contracts, which do not have inherent physical value and whose value is based on the assets they represent, are an example of a financial asset.

RELATED TERMS
  1. Nonmonetary Transaction

    Transactions that do not result in a transfer of funds between ...
  2. Goodwill To Assets Ratio

    A ratio that measures how much goodwill a company is recording ...
  3. Asset

    1. A resource with economic value that an individual, corporation ...
  4. Financial Asset

    An asset that derives value because of a contractual claim. Stocks, ...
  5. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  6. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
Related Articles
  1. Can You Count On Goodwill?
    Personal Finance

    Can You Count On Goodwill?

  2. Intangible Assets Provide Real Value ...
    Markets

    Intangible Assets Provide Real Value ...

  3. Stock Safety: Top 3 Ways to Limit Your ...
    Options & Futures

    Stock Safety: Top 3 Ways to Limit Your ...

  4. Can You Buy Stock Insurace? 3 Strategies ...
    Options & Futures

    Can You Buy Stock Insurace? 3 Strategies ...

Hot Definitions
  1. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  2. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  3. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  4. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  5. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  6. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
Trading Center