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1Types
3See also
4References
Types[edit]
According to the International Financial Reporting Standards (IFRS), a financial asset can be:
Contractual right to receive cash or another financial asset from another entity or to
exchange financial assets or financial liabilities with another entity under conditions that are
potentially favourable to the entity,
A contract that will or may be settled in the entity's own equity instruments and is either 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 exchange
of a fixed amount of cash or another financial asset for a fixed number of the entity's own equity
instruments.[5]
Financial assets "held for trading" i.e., which were acquired or incurred principally for the
purpose of selling, or are part of a portfolio with evidence of short-term profit-taking, or
are derivatives are measured at fair value through profit or loss.
Financial assets with fixed or with determinable payments and fixed maturity which the
company has to be willing and able to hold till maturity are classified as "held-to-maturity"
investments. Held-to-maturity investments are either measured at fair value through profit or loss
by designation, or determined to be financial assets available for sale by designation.
Financial assets with fixed or determinable payments which are not listed in an active market
are considered to be "loans and receivables". Loans and receivables are also either measured
at fair value through profit or loss by designation or determined to be financial assets available
for sale by designation.
All other financial assets are categorized as financial assets "available for sale" and are
measured at fair value through profit or loss by designation. [6]
For financial assets to be measured at fair value through profit or loss by designation, designation is
only possible at the amount the asset was initially recognized at. Moreover, designation is not
possible for equity instruments which are not traded in an active market and the fair value of which
cannot be reliably determined. Further (alternative) requirements for designation are e.g. at least a
clear diminution of a "mismatch" with other financial assets or liabilities, [7] an internal valuation and
reporting and steering at fair value,[8] or a combined contract with an embedded derivative which is
not immaterial and which may be separated.[9] Regarding financial assets available for sale by
designation, designation is only possible at the amount the asset was initially recognized at as well.
However, there are no further restrictions or requirements.
https://en.wikipedia.org/wiki/Financial_asset