What is Non-Operating Expense?

Non-operating expenses are costs that are not directly related to the main activities of a business. Interest charges and losses from selling assets are examples of non-operating expenses. Accountants may exclude non-operating expenses and revenues to better understand how well the core business is performing, without the influence of financing and other factors. – What is Non-Operating Expense?

Operating expenses are expenses that are directly related to the daily operations of a business. On the other hand, non-operating expenses are expenses that are not directly related to the day-to-day functioning of a business.

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Non-operating expenses are costs that happen outside of a company’s regular operations. These expenses can be monthly charges such as interest payments on debt, or one-time expenses like restructuring or currency exchange costs.

Non-operating expenses are listed at the end of a company’s income statement. This helps users of financial statements focus on the main business activities shown at the top of the income statement. Making a profit from core operations is essential for a company.


Public companies typically fund their expansion by using a mix of debt and equity. Regardless of how the funds are divided, any company with corporate debt will have to make monthly interest payments. These payments are classified as non-operating expenses since they are not directly related to the company’s day-to-day operations, but rather to the financing of those operations.

When a company sells a building but is not in the real estate business, the sale is classified as a non-operating activity. If the building is sold at a loss, that loss is considered a non-operating expense.