Financial Instruments Definition as per IFRS 9 STATES it could be Financial Asset, Financial Liability or an Equity Instrument of another entity.
The objective of IFRS 9 is to ESTABLISH principles for the financial reporting of financial assets and liabilities that will present relevant and valuable information to users of financial statements for their assessment of the amounts, timing, and uncertainty of the entity’s future cash flows.
Financial Instruments Definition As Per IFRS 9
IFRS 9 specifies how an entity should CLASSIFY and MEASURE financial assets, financial liabilities, and some contracts to buy or sell non-financial items.
‘Financial Instrument’ is a contract that gives rise to BOTH:
- A Financial Asset of one entity; AND
- Either a Financial Liability or an Equity Instrument of another entity.
IFRS 9 ISSUED in July 2014 specifies how an entity should classify and measure financial assets, financial liabilities, and some contracts to buy or sell non-financial items and it replaced IAS 39.
Chartered Accountant (Institute of Chartered Accountants of Pakistan)
Bachelor of Accounting Honours (Asia e University, Malaysia)