An asset that cannot, or need not, be capitalized because the cost to acquire, construct, or improve it is below the capitalization threshold (e.g., $1,000). It is a non-expendable item (economic resource) which has a useful life exceeding one year, while its acquisition cost is below threshold.

Non-capitalized assets are not recorded on the balance sheet and the cost of acquisition is expensed at the time of purchase. As opposed to a capitalized asset, the cost of a non-capitalized asset is not expensed over time (the expense is known as depreciation).

In specific situations, donated assets (even where market price is above capitalization threshold, such as lands) are recognized at a purchase price of zero. Such assets are recorded as non-capitalized assets with a nominal value (e.g., $1).