What is a 'Non-Core Item'

A non-core item is an engagement considered to be outside of business activities or operations that are the main revenue source of the business. Non-core items are considered to be from peripheral or incidental activities, while core items are considered central to operations. Often, businesses will outsource non-core items to firms that specialize in these activities. This is especially true for smaller firms.

In accounting, non-core items can also relate to interest, taxes and other expenses.

BREAKING DOWN 'Non-Core Item'

Non-core items are prevalent in most businesses. These are the activities that make the business run, even though they are not directly related to producing the service or product which the business sells to generate its revenue. Some examples of non-core items are human resources, data processing, supply-chain management and logistics. Many firms that specialize in these areas and businesses who wish to offload these tasks to free up manpower to focus on other things can outsource these tasks.

Even if non-core items are considered separate from revenue producing business operations, they may still represent a substantial part of a business' health and often represent a significant portion of the business' expenses. If non-core items are not reported with the same level of transparency, then stakeholders are not being given the entire picture.

RELATED TERMS
  1. Itemized Statement

    An itemized statement is a period document issued by a financial ...
  2. Big Ticket Item

    A big ticket item is a high-cost item, such as a house or car, ...
  3. Exception Item

    An exception item is a banking term used to describe a check ...
  4. Tax Preference Item

    Tax preference item is a type of income, normally tax-free, that ...
  5. Itemized Deduction

    Itemized deductions are deductions that allow taxpayers to take ...
  6. Wage Expense

    Wage expense is the cost incurred by companies to pay hourly ...
Related Articles
  1. Investing

    The One-Time Expense Warning

    These income statement red flags may not spell a company's downfall. Learn why here.
  2. Personal Finance

    How To Use Price Adjustments To Get The Best Deals

    We take a look at 6 top retailers' price adjustment policies, and tell you how to get your money's worth.
  3. Investing

    Key Financial Ratios for Restaurant Companies

    These 7 financial ratios provide insight into the profitability of a restaurant, prospective longevity of the business and quality of decisions being made.
  4. Small Business

    Business Development: The Basics

    Find out what business development consists of. Learn about the basic strategic ideas, initiatives and activities aimed towards making a business better.
  5. Insights

    What is Supply & Demand?

    The law of supply and demand is one of the most basic principles in economics. In simplest terms, the law of supply and demand states that when an item is scarce, but many people want it, the ...
  6. Investing

    How To Efficiently Read An Annual Report

    Learn how to read between the lines and decipher the actual condition of a company.
  7. Personal Finance

    Most Popular Outsourced Jobs

    The reasons behind outsourcing vary, and can create more efficient processes and products.
  8. Tech

    The 5 Best Alternatives to eBay (AMZN, EBAY)

    Understand the benefits and drawbacks of eBay, as well as the industry in which it operates. Learn about five alternatives to eBay and its services.
  9. Taxes

    The Impact of New Tax Code on Financial Planning

    Here's how the Tax Cuts and Jobs Act will impact financial planning.
  10. Small Business

    How to Outsource Work: 2 Tips for Business Owners

    Small business owner can increase efficiency and profits by outsourcing routine functions such as bookkeeping and payroll.
RELATED FAQS
  1. What is the accounting treatment for unusual or infrequent items for IFRS and U.S. ...

    Learn to identify the unusual or infrequent items listed on an income statement prepared according to either US GAAP or IFRS ... Read Answer >>
  2. Which is better for tax deductions, itemization or a standard deduction?

    Each deduction that you claim may result in a decrease in the amount of taxes that you owe. However, whether you receive ... Read Answer >>
  3. What is the difference between transfer price and standard cost?

    Learn about the difference between transfer pricing and standard cost and how companies decide what to charge for products ... Read Answer >>
  4. What are the main methods for calculating business costs?

    See why different economic actors use different methods for calculating costs, and learn how different methods can impact ... Read Answer >>
  5. What effect does the income effect have on my business?

    Learn if you should open or modify your existing small business based on the income effect. Learn if it would positively ... Read Answer >>
Trading Center