Classification of Assets: Usage

If assets are classified based on their usage or purpose, assets are classified as either operating assets or non-operating assets.

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:

  • Cash
  • Accounts receivable
  • Inventory
  • Building
  • Machinery
  • Equipment
  • Patents
  • Goodwill

Non-operating Assets

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

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