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Literature that's lost the plot? (3-7)

Ross

I believe the answer is:

non-fiction

I'm a little stuck... Click here to teach me more about this clue!

'literature' is the definition.
Both the definition and answer are singular nouns.
Maybe they are linked in a way I don't understand?

'lost the plot?' is the wordplay.
'lost' becomes 'non' (I can't justify this - if you can you should believe this answer much more).
'the plot?' becomes 'fiction' (plot is a kind of fiction).
'non'+'fiction'='NON-FICTION'

'that's' acts as a link.

Can you help me to learn more?

(Other definitions for non-fiction that I've seen before include "Factual writing" , "As a writer, you couldn't make it up!" .)

I've seen this clue in The Telegraph.
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