Non-monetary items are items in an entity's financial statements that do not represent a fixed or determinable amount of money, and are not held or owed in a currency. Examples of non-monetary items include property, plant, and equipment, inventories, intangible assets, investments in equity securities, and prepaid expenses.

The treatment of non-monetary items can depend on various factors, such as their useful life, their fair value, and their ability to generate future cash flows. For example, property, plant, and equipment are typically recorded on the balance sheet at their historical cost, adjusted for any depreciation or impairment. Inventories are recorded at the lower of cost or net realizable value, while intangible assets may be recorded at cost or at fair value, depending on the circumstances.

The valuation of non-monetary items can also be affected by changes in economic or market conditions. For example, the fair value of an investment in equity securities may fluctuate based on changes in market prices, while the net realizable value of inventory may change based on changes in demand or competition.

Overall, the treatment of non-monetary items in financial reporting can be more complex than that of monetary items, due to their varying characteristics and valuation methods.

Here's an example to illustrate the treatment of a non-monetary item:

Let's say a company purchases a delivery truck for $50,000, with an estimated useful life of 5 years and a residual value of $5,000. The company uses the straight-line depreciation method to allocate the cost of the truck over its useful life.

Assuming that the company uses U.S. GAAP, the journal entry to record the purchase of the truck would be:

Delivery truck (property, plant, and equipment) $50,000

Cash (asset) $50,000

Then, at the end of each year, the company would record depreciation expense based on the straight-line method, which is calculated as follows:

Depreciation expense = (Cost - Residual value) / Useful life

Depreciation expense = ($50,000 - $5,000) / 5

Depreciation expense = $9,000

The journal entry to record depreciation expense would be:

Depreciation expense (expense) $9,000

Accumulated depreciation (contra-asset) $9,000

In this example, the delivery truck is a non-monetary asset that is recorded on the balance sheet at its historical cost. The company then uses the straight-line method to allocate the cost of the truck over its useful life, which results in an annual depreciation expense. The accumulated depreciation account is a contra-asset account that reduces the carrying value of the delivery truck on the balance sheet over time.

Here's a tabulated example to illustrate the treatment of a non-monetary item:

In this example, the company purchases a delivery truck for $50,000 with an estimated useful life of 5 years and a residual value of $5,000. The purchase of the delivery truck is recorded as an asset on the balance sheet. Depreciation expense is calculated using the straight-line method, and is recorded each year as an expense on the income statement, and as a contra-asset on the balance sheet in the accumulated depreciation account. The carrying value of the delivery truck on the balance sheet is calculated as the purchase price less accumulated depreciation.