Earning Assets

An earning asset is any asset which delivers returns without significant effort on its owners’ part.

Money invested in a business, held in an interest-bearing bank account or invested in stocks, bonds or medium term notes which deliver capital gains or yields can be classified as an earning asset. Property which is rented out and generates an income could also be considered an earning asset.

Non-earning assets, on the other hand, are assets which do not deliver returns. These may include money invested in non-interest-bearing bank accounts, and real estate or other property which does not generate an income or gain in value over time.

Earning assets can be considered investments, while non-earning assets can be considered liabilities.

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