Financial Asset Definition IFRS 9 DEFINES Financial Asset any asset that is Cash, Equity Instrument of another entity, Contractual Right to RECEIVE cash/another financial asset or to EXCHANGE financial assets/financial liabilities, Contract that will or May-be settled in entity’s own equity instruments.
Financial Asset Definition IFRS 9
IFRS 9 Financial Instruments specifies how an entity should CLASSIFY and MEASURE Financial Assets, Financial Liabilities, and Contracts to buy or sell Non-Financial Items.
‘Financial Asset’ as per IFRS 9 is any asset that is:
| (a) Cash |
| (b) An Equity Instrument of another entity |
| (c) A Contractual Right: – To receive cash/another financial asset from another entity; OR – To exchange financial assets/financial liabilities under conditions that are potentially favorable to the entity. |
| (d) A Contract that will or May-be settled in the entity’s own equity instruments and is: – A non-derivative for which the entity is or May-be OBLIGED to receive a variable number of the entity’s own ‘Equity Instruments’; OR – A derivative that will or May-be SETTLED other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own ‘Equity Instruments’. |
The Bottom Line
Financial Asset Definition IFRS 9 a concept that DEFINES ‘Financial Asset’ as any asset that is Cash, Equity Instrument, Contractual Right, Contract that will or May-be settled in entity’s own equity instruments.
Chartered Accountant (Institute of Chartered Accountants of Pakistan)
Bachelor of Accounting Honours (Asia e University, Malaysia)