Non-Production Assets
Non-production assets are those that are not related to the production of goods or services by an organization. As such, these types of assets include everything from building projects and vehicles to office equipment and networks.
In an organization’s balance sheet, non-production assets are listed under the heading “Other Assets”. This category of assets are considered to be less liquid than production assets, as they cannot be easily converted into cash. Non-production assets can also be referred to as “fixed assets” or “long-term investments”.
Non-production assets are used to support or enhance the operations of a business. Examples of non-production assets include computers and networks, trucks and office equipment, safety equipment, furnishings, and advertising material. Additionally, they may also be used to purchase land, buildings, or securities.
These assets are often costly, so it is important to ensure that they are bought and managed correctly. First, it’s important to consider the purpose of the asset, who will be using it, and the potential risks and costs associated with it. Once this has been established, the organization should consider whether the asset will pay for itself over time. If so, it should also be evaluated to determine the return on investment, which is the ratio of the income generated to the cost of the asset.
The maintenance of non-production assets is also important to ensure that they remain in usable condition. For example, regular maintenance should be done on vehicles and office equipment. This includes the regular service and repair of these assets, as well as the replacement of parts as needed.
Although non-production assets can be very costly to purchase and maintain, they are often essential for organizations to support their operations. For example, computers and networks provide organizations with the capability to perform their tasks, whereas trucks and office equipment enable them to transport and store items. As such, it is important that non-production assets are properly managed to ensure that the organization fully utilizes them.
