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Understanding Non-Earning Asset
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One such concept worth discussing about, for the benefit of even a layman, is ‘Non-Earning Asset’.
Therefore, when a loan/advances account remains irregular for the specified period of time (90 days) it is classified as Non-Performing Asset (NPA).
A skewed practice needs to be touched upon here before I come to the topic of Non-Earning Asset.
Having looked at what is a non-performing asset, let us now finally come to the term ‘non-earning asset’.
Cash is a non-earning asset.