Podcast
Questions and Answers
A financial instrument is defined as a contract that results in a financial asset for one entity and a financial liability for the same entity.
A financial instrument is defined as a contract that results in a financial asset for one entity and a financial liability for the same entity.
False (B)
Equity instruments are contracts that represent a residual interest in the assets of an entity after all liabilities are deducted.
Equity instruments are contracts that represent a residual interest in the assets of an entity after all liabilities are deducted.
True (A)
Transaction costs for financial liabilities measured at fair value through surplus or deficit are expensed immediately.
Transaction costs for financial liabilities measured at fair value through surplus or deficit are expensed immediately.
True (A)
Derivative financial instruments derive their value from the price movement of underlying assets such as commodity prices, foreign exchange rates, and interest rates.
Derivative financial instruments derive their value from the price movement of underlying assets such as commodity prices, foreign exchange rates, and interest rates.
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Loans and receivables must always be measured at fair value, regardless of market conditions.
Loans and receivables must always be measured at fair value, regardless of market conditions.
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Held-to-maturity investments can be classified under financial assets at fair value through surplus or deficit.
Held-to-maturity investments can be classified under financial assets at fair value through surplus or deficit.
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Financial assets that do not have a quoted market price are measured at fair value.
Financial assets that do not have a quoted market price are measured at fair value.
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Financial assets at fair value through surplus or deficit are measured at fair value plus any transaction costs upon initial recognition.
Financial assets at fair value through surplus or deficit are measured at fair value plus any transaction costs upon initial recognition.
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An entity must recognize a financial liability when it agrees to the contractual terms of the instrument.
An entity must recognize a financial liability when it agrees to the contractual terms of the instrument.
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All financial liabilities must be measured at fair value through surplus or deficit.
All financial liabilities must be measured at fair value through surplus or deficit.
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Flashcards
Financial Instrument
Financial Instrument
A contract creating a financial asset for one entity and a financial liability or equity for another.
Financial Asset
Financial Asset
An asset arising from a contractual right to receive cash or another financial asset, or potentially favorable financial instrument exchange.
Financial Liability
Financial Liability
A contractual obligation to deliver cash or another financial asset, or potentially unfavorable financial instrument exchange.
Initial Recognition of Financial Asset
Initial Recognition of Financial Asset
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Derivative
Derivative
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Financial Asset Measurement (Initial)
Financial Asset Measurement (Initial)
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Financial Liability Measurement (Initial)
Financial Liability Measurement (Initial)
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Financial Asset Subsequent Measurement
Financial Asset Subsequent Measurement
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Financial Liability Subsequent Measurement
Financial Liability Subsequent Measurement
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Transaction Costs (Financial Assets/Liabilities)
Transaction Costs (Financial Assets/Liabilities)
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