Non-Operating Asset
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Definition of 'Non-Operating Asset'Classes 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 will be listed on the balance sheet along with operating assets, and may or may not be broken out separately.Non-operating assets are held by companies for several reasons. It could be an asset related to a closed portion of the business, and might be sold in the future. Non-operating assets can also be used to diversify operational risks (for example by owning some real estate or patents) or simply used as a cash investment. Also known as "redundant assets". |
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Investopedia explains 'Non-Operating Asset'Non-operating assets are often valued separately than operating assets when evaluating a company or its stock. Their value is counted towards the total worth of the company, but may be excluded from financial models that estimate the future profit earning potential of the core business segments and the assets used to generate core revenues as these aren't considered to be assets that will generate future earnings and revenue. |
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