If assets are classified based on their usage or purpose, assets are classified as either operating assets or non-operating assets.
Operating assets are assets that are required in the daily operation of a business. In other words, operating assets are used to generate revenue from a company’s core business activities.
Examples of operating assets include:
- Accounts receivable
Non-operating assets are assets that are not required for daily business operations but can still generate revenue.
Examples of non-operating assets include:
- Short-term investments
- Marketable securities
- Interest income from a fixed deposit