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Simple English definitions for legal terms
nonmonetary item
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A quick definition of nonmonetary item:
A nonmonetary item is something that you own or owe that can change in value. This could be things like land, equipment, inventory, or promises to fix things under warranty. The value of these things can go up or down over time.
A more thorough explanation:
Definition: A nonmonetary item is an asset or liability whose value changes over time. Examples of nonmonetary items include land, equipment, inventory, and warranty obligations.
Examples:
- Land: The value of land can fluctuate depending on factors such as location, zoning laws, and market demand.
- Equipment: The value of equipment can change due to technological advancements, wear and tear, and market demand.
- Inventory: The value of inventory can vary depending on supply and demand, expiration dates, and changes in consumer preferences.
- Warranty obligations: The value of warranty obligations can change based on the number of claims made and the cost of repairs or replacements.
These examples illustrate the definition of nonmonetary items because their value is not fixed and can change over time. This makes them different from monetary items, such as cash or accounts receivable, which have a fixed value.