A Guide to Non-Financial Assets for Small Businesses (2024)

FAQs

What are examples of nonfinancial assets? ›

Examples of non-financial assets include tangible assets, such as land, buildings, motor vehicles, and equipment, as well as intangible assets, such as patents, goodwill, and intellectual property.

A nonfinancial asset is an asset that derives its value from its physical traits. Examples include real estate and vehicles. It also includes all intellectual property, such as patents and trademarks.

The fair value of a non-financial asset is determined based on its 'highest and best use'. This refers to the most advantageous use of the asset that would maximise its value. The perspective of market participants guides this determination, even if the entity has a different intended use or no use for the asset.

Examples of nonmonetary assets that are considered tangible are a company's property, plant, equipment, and inventory. Examples of nonmonetary assets that are considered intangible are a company's intellectual property, such as its patents, copyrights, and trademarks.

Intangible assets are nonphysical assets, such as patents and copyrights. They are considered noncurrent assets because they provide value to a company but cannot be readily converted to cash within a year.

The non-financial business economy includes the sectors of industry, construction, distributive trades and services.

General principles. 26.5 If, and only if, the recoverable amount of an asset is less than its carrying amount, the entity shall reduce the carrying amount of the asset to its recoverable amount. That reduction is an impairment loss.

Non-financial non-produced assets consist of natural resources (e.g. land, mineral and energy reserves, non-cultivated biological resources such as virgin forest, water resources, radio spectra and others), contracts, leases and licences as well as goodwill and marketing assets.

Stocks of fixed assets and inventories are part of the balance sheet of non- financial assets.

Non-financial assets can be further divided into produced assets (fixed assets, inventories, and valuables) and non-produced assets (natural resources, contracts, leases and licenses, and goodwill and marketing assets).

What is an example of a non-financial liability? ›

Non-financial liabilities may also denote liabilities that do not arise from financial transactions. Examples of such liabilities include liabilities to employees, tax liabilities, social security payables, employers' liability insurance premiums, etc.

a contractual claim to something of value; modern economies have four main types of financial assets: bank deposits, stocks, bonds, and loans. In reality, there are many more types of financial assets (like derivatives, calls, puts, and so on), but you only need to know the basics of these four types for this course.

Common examples of non-monetary assets include goodwill, copyrights, inventory, and plant, property and equipment (PP&E). No established market exists for non-financial assets, and asset owners must find potential buyers who are interested in acquiring the assets.

What is a non-cash asset? A non-cash asset can be any item of appreciating value, like privately held stock, farm equipment, and real estate (whether residential homes, commercial property or land). Other examples of non-cash assets include stock and mutual funds, retirement assets and cryptocurrency.

Non earning assets or non performing assets(npa) are assets that dont generate income. For eg- cash at hand, cash at bank(without interest), plant land or machinery not used by the firm, etc.

A non-financial asset is an asset that cannot be traded on the financial markets and whose value is derived by its physical net worth rather than from a contractual claim, as opposed to a financial asset (e.g., stock, bonds).