Financial Liability Definition DEFINES Financial Liability any liability that is Contractual Obligation to DELIVER 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 Liability Definition
‘Financial Liability’ as per IFRS 9 is any liability that is:
|(a) A Contractual Obligation:|
– To deliver cash/another financial asset from another entity; OR
– To exchange financial assets/financial liabilities under conditions that are potentially unfavorable to the entity.
|(b) 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 deliver 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 Liability Definition a concept that DEFINES ‘Financial Liability’ as any Liability that is Contractual Obligation, 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)