What are redundant assets?
Any assets that have the potential to provide income or ROI, but are not tied to the running of a company, are classed as redundant or non-operating assets. They hold value for the company but they are not essential to the company's core operations.
Where have you heard about redundant assets?
Redundant assets are included on a company's balance sheet and their value is counted in evaluations of the company's total worth. On the other hand, because they are not involved in the core operations of the business, they are not factored into estimates of a company's future growth or earning potential.
What you need to know about redundant assets.
A company's redundant assets could range from property or land that's not used in the company's operation to cash or other marketable securities that have accumulated on the company's balance sheet.
As well as adding value to a company, redundant assets can provide an extra source of income. For example, if a company has a property it no longer needs to use for its core operations it can rent out the building to raise non-operating income. This can help diversify risk because it gives the business a financial backup it can use if it loses money through its normal operations.
Find out more about redundant assets.
Redundant assets can be a source of non-operating income for a company. Find out about other ways a company can earn non-operating income.