Nonmonetary assets are any type of assets that do not carry some sort of fixed value. Assets of this type can be sold in order to generate some sort of cash, but the amount of revenue they can bring is dependent on the current status of the economy and the type of demand that is present for the asset at the time it is offered for sale. Since the value of nonmonetary assets will vary depending on current market conditions, owners will often pay close attention to the movement of the economy and will only choose to sell the assets when demand is high and the potential for generating an equitable profit is more likely.
The nature of nonmonetary assets sets theses types of holdings apart from what is known as monetary assets. Examples of the latter would be any asset with a fixed value, such as the balance in a bank account, cash on hand, or any type of financial notes or holding that have an established face value. Assets that would be considered nonmonetary due to the fluctuation of price based on consumer demand and the state of the economy include real estate holdings, copyrights of different types, inventories of goods and services that are ultimately offered for sale, and manufacturing equipment.
While nonmonetary assets do not have a fixed or permanent value in the marketplace, they can still be extremely profitable for the owner. For example, an investor may purchase real estate at a low price, hold the property for several years as the assessed value appreciates, then sell the property for a price that easily offset the original cost of purchase plus any improvements made in the interim. In like manner, the copyright on a novel may appreciate in value over the years if that novel becomes in high demand, necessitating the release of multiple editions from time to time.
While there is no guarantee that nonmonetary assets will always appreciate in value, owners typically receive some benefit from ownership. Property owners can rent out the real estate to create a revenue stream, while the owners of manufacturing equipment can use the devices to produce goods that are in turn sold to others. The combination of the ability to use the assets during ownership as well as the potential to generate some type of return by selling them when demand is high make nonmonetary assets well worth the effort to purchase and hold.
