A non-monetary item is an item of financial statements (of an entity) that is not a monetary item– that is, it cannot be quickly converted to cash or cash equivalents (or monetary assets), and its value is subject to changes due to external factors beyond the control of an entity. Non-monetary items care classified as non-monetary assets and non-monetary liabilities.
Examples of non-monetary items include physical assets such as machinery and equipment (generally PPE). These items are non-monetary because their value generally changes (decreases) over time, either with usage (and corresponding depreciation effect) or obsolescence. Likewise, inventory is a non-monetary asset because it can lose its value or part thereof due to obsolescence. Other examples are patents, goodwill, buildings, etc.
Generally speaking, any items that are not monetary in nature do belong to the categories of non-monetary items.
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