Financial Instrument

Financial Instrument




Loading

Financial Instrument: A contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial asset : Any asset that is:

  • Cash;
  • An equity instrument of another entity;
  • A contractual right to receive cash or another financial asset from another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; or
  • A contract that may or will be settled in the entity’s own equity instrument and is not classified as an equity instrument of the entity

Financial liability: Any liability that is:

  • A contractual obligation:
  • to deliver cash or another financial asset to another entity; or
  • to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavorable to the entity.
  • A contract that will or may be settled in the entity’s own equity instruments and is not classified as an equity instrument of the entity

Equity Instrument: Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities

 

 

[button color=”” size=”” type=”round” target=”” link=”https://thetaxtalk.com/”]home[/button]  [button color=”” size=”” type=”round” target=”” link=”https://thetaxtalk.com/submit-article-publish-your-articles-here/”]Submit Article [/button]  [button color=”” size=”” type=”round” target=”” link=”https://thetaxtalk.com/discussion-on-tax-problem/”]Ask Question [/button]




Menu