Description
A non-operating expense is a cost that does not directly arise from a company's core business operations. Non-operating expenses must be reported separately from operating expenses so that stakeholders get a clear view of the company's financial performance.
Example
Interest payments on borrowings, legal fees, inventory write-offs, etc.
Why it matters
Although Non-operating expenses are reported at the bottom of a company's income statement, the method of reporting does not undermine its importance. Investors and analysts do focus on this expense component as it can have a potential impact on the company's financial performance.