financialasset–aninvestment–whiletheissueroftheshareswhoraisedfinancehastoaccountforanequity instrument–equitysharecapital.Athirdexampleiswhenanentityraisesfinancebyissuingbonds(debentures). Theentitythatsubscribestothebonds–ielendsthemoney–hasafinancialasset–aninvestment–whilethe ...
Let us start by looking at the definition of a financial instrument, which is that a financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of an other entity. With references to as...
A legal fiction is the assumption of certain facts, or depictions of reality, which are palpably false, yet the use of which allow us to achieve useful objectives (typically moral objectives). One of the most famous legal fictions is the idea that a corporation is a "person." Legal ...
financial asset – an investment – while the issuer of the shares who raised finance has to account for an equity instrument – equity share capital. A third example is when an entity raises finance by issuing bonds (debentures). The entity that subscribes to the bonds – ie lends the mon...
But, if you intend to settle in cash, then here we go, it’s a financial instrument and you need to recognize a derivative from the day 1. What is a financial liability? Financial liability is: A contractual obligation To deliver cash or another financial asset to another entity (e.g....
Another example of an investment instrument that is considered to carry a low rate of risk is thecertificate of deposit(CD). This type of account requires that the depositor commit to allowing the money to remain in the account for a specified period of time before any withdrawals can take ...
Alone, derivatives hold no value. The value of these financial instruments is determined by the underlying security or asset, such as a stock or natural resource. Hedge funds, which are lightly regulatedinvestment fundsrun by professionals and designed to generate returns that exceed the broader mar...
All of this financial talk is a bit above my head, I'm afraid, but my brother in law's parent just passed on, and we're trying to sort out their finances. If anybody could give me a simple run down on this I'd be really grateful. ...
A debt instrument is a tool an entity can use to raise capital. Any type of instrument primarily classified as debt can be considered a debt instrument.
A debt security is adebt instrumentthat can be bought or sold between two parties and has basic terms defined, such as the notional amount (the amount borrowed), interest rate, and maturity and renewal date. Examples of debt securities include a government bond, corporate bond, certificate of...