nonperforming asset

Nonperforming asset

An asset that is not effectively producing income, such as an overdue loan.

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nonperforming asset

An asset that produces no income. For example, a loan on which the borrower is not making payments is often described as a nonperforming asset. Firms often continue to include these assets, which are of questionable value, on their financial statements because they do not wish to show the losses entailed in writing them off. Also called nonperforming loan. Compare underperforming asset.