CFAS - Financial Instruments

A financial instrument is any contract that gives rise to

• A financial asset

• A financial liability

• A financial asset of one entity and a financial liability of another entity

• A financial asset of one entity and a financial liability or equity instrument of another entity

Which is not classified as a financial instrument?

• Convertible bond

• Foreign currency contract

• Warranty provision

• Loan receivable

Which cannot be considered a financial asset?

• Cash

• A contractual right to receive cash or another financial asset from another entity.

• A contractual right to exchange financial instruments with another entity under conditions that are potentially unfavorable

• An equity instrument of another entity

Which should be classified as financial asset?

• Patent

• Trade accounts receivable

• Inventory

• Land

A financial liability

• Must be classified as noncurrent liability

• Is a contractual obligation to deliver cash or another financial asset to another entity

• is a contractual obligation to exchange financial instrument with another entity under conditions that are potentially favorable to the entity

• Is a contractual obligation to deliver cash or any asset to another entity

Financial assets include all of the following, except

• Prepaid expenses

• Cash in bank

• Investment in equity instrument

• Notes Receivable

Financial liabilities include

• Deferred revenue

• Warranty liability

• Constructive obligation

• Loan payable

Financial liabilities include all of the following except:

• Trade accounts payable

• Notes payable

• Bonds payable

• Income Tax Payable

It is any contract that evidences residual interest in the assets of an entity after deducting all of the liabilities

• Equity Instrument

• Debt Instrument

• Loan Receivable

• Financial asset with indeterminable fair value

Which is not an equity intstrument?

• Ordinary share capital

• Bond payable

• Preference share capital

• Share option or share warrant