What is Financial Instrument?
Financial instrument in essence is simply a contract that will ultimately result in financial asset in the hands of one party and corresponding financial liability in the hands of another party to the same contract. For example, invoice, bill receivable, promissory note, cheques are well known examples of financial instruments. However, the distinguishing factor between financial […]
Is cash a tangible asset or an intangible asset?
In order to check the status of an asset whether it relates to a particular class or not, it is always a good idea that we go for the definitions provided in the relevant pronouncements first as they give the criteria whether a certain asset can be classified in one way or not. In this […]
Are prepaid expenses financial asset?
In order to confirm whether a particular asset is a financial asset or not, we will have to look at the definition of financial asset International Accounting Standard IAS 32 defines the term financial asset in para 11. Although the definition of financial asset is a bit detailed and lengthy but I will be quoting […]
