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Definition

An accounting term which refers to entries in the books of account which do not reflect the movement of money. The most common example is depreciation where the full cost of an asset is reflected in the asset account when it is purchased, but that cost is slowly expensed out to the company's profit and loss account over the useful life of the asset. Those depreciation costs do not reflect the movement of cash. Another example, might be on the revaluation of an asset. If an asset is revalued then the profit or loss on revaluation is taken directly to the balance sheet and does not involve any movement of cash. Non-cash items are obviously not included in the company's Statement of Cash Flows.

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