Non-Operating Expenses

Non-Operating Expenses are conceptually similar to your Non-Operating Income (albeit with the opposite sign). They refer to expenses incurred by activities not relating to the core operations of the business. Therefore, financial analysts usually separate non-operating expenses from operating ones in order to examine the core (operating) performance of the business, ignoring effects of irregular, one-time events.

Examples of Non-Operating Expenses include costs incurred from restructuring or reorganizing, currency exchange, charges on obsolescence of inventory, drops in values of marketable securities held by your company, other asset write-offs, etc.

It is important to note that some of these expenses are ‘non-cash charges’ or ‘paper losses’. Which might be actually beneficial for your bottom line (and financial value) because they reduce your tax base and, therefore, the amount of taxes that you pay into government coffers.