Non-Operating Expense

An expense incurred by activities not relating to the core operations of the business. Accountants may remove non-operating expenses or revenues in order to examine the performance of the business, ignoring effects of financing or irrelevant issues.

Non-operating expenses may take a variety of forms. The most common type relate to interest charges or other costs of borrowing. A firm may also categorize any costs incurred from restructuring or reorganizing, currency exchange, charges on obsolescence of inventory, as non-operating expenses. Expenses relating to employee benefits, such as pension contributions would also be considered as a non-operating cost.