An item of financial statements (of an entity) that is not a monetary item– that is, it cannot be quickly converted to cash or cash equivalents (or monetary assets), and its value is subject to changes due to external factors beyond the control of an entity. For example, physical assets such as machinery and equipment (generally, PPE) are non-monetary items because their value generally changes (decreases) over time, either with usage (and corresponding depreciation effect) or obsolescence. Likewise, inventory is a nonmonetary asset because it can lose its value or part thereof due to obsolescence.

Non-monetary items (non-monetary assets, non-monetary liabilities) are generally carried at cost or cost adjusted for depreciation; hence these items are measured at amounts current (prevailing prices) at the date of acquisition.