Monetary item is an asset or liability carrying a value in dollars that will not change in the future. These items have a fixed numerical value in dollars, and a dollar is always worth a dollar. Monetary assets (such as cash and accounts receivable) and monetary liabilities (such as notes and accounts payable) that have a fixed exchange value unaffected by inflation or deflation.
Nonmonetary item is an asset or liability that does not have a fixed exchange cash value, but whose value depends on economic conditions.
|Aspect||Monetary Item||Nonmonetary Item|
|Exchange Rate||It has a fixed numerical value of the exchange rate.||The fixed or determinable amount of exchange rate is absent.|
|Item Includes||It includes a current asset or liability.||It includes a fixed asset or liability.|
|Calculation||The value of a monetary asset is usually calculated according to||It is calculated by the acquisition cost value.|
|Inflation Effects||Holding monetary items during a period of inflation will result in a purchasing power loss gain.||During the period of inflation, the price will be adjusted.|
|Period of Time||A monetary asset can be accessed in a relatively short period of time||It cannot be accessed within a short time.|
|Tangibility||It is tangible.||It is intangible.|
|Compensation||There is no compensation for changes in the value of money.||There is compensation for changes in the value of money.|
|Example||Cash, Account Receivable, Notes, and Account Payable.||Copyrights and Patents, Goodwill, Inventories, Property.|