,
, Financial Instruments
To establish principles for the financial reporting
of financial assets and financial liabilities that will
present relevant and useful information to users
of financial statements for their assessment of
the amounts, timing and uncertainty of the
entity’s future cash flows. Presentation is to establish principles for
presenting financial instruments as
liabilities or equity and for offsetting
financial assets and financial liabilities.
IAS 32 prescribes requirements for:
Disclosures is to require entities to provide disclosures
• presentation of financial instruments as liabilities
in their financial statements that enable users to
or equity;
evaluate:
• offsetting financial assets and liabilities;
• the significance of financial instruments for the
• classification of financial instruments into financial
entity's financial position and performance; and
assets, financial liabilities and equity instruments;
• the nature and extent of risks arising from financial
• classification of related interest, dividends, losses
instruments to which the entity is exposed during
and gains; and
the period and at the reporting date, and how the
• circumstances in which financial assets and
entity manages those risks.
financial liabilities should be offset.
3
, FL
FINANCIAL LIABILITY
FINANCIAL INSTRUMENT IS ANY LIABILITY THAT:
• Has a contractual liability
is any contract that gives rise to a financial • To deliver cash or another financial asset
asset of one entity and a financial liability to another entity
Financial Instruments
or equity instrument of another entity. • To exchange financial assets or liabilities
with another entity under conditions
that are potentially unfavorable to the
FA
FINANCIAL ASSET
entity
IS ANY ASSET THAT: • A contract that will or may be settled in the
• Is cash entity’s own equity instruments
• Is an equity instrument of another entity
• Has a contractual right
• To receive cash or another financial asset
from another entity
• To exchange financial assets or liabilities with
EQUITY INSTRUMENT
• Any contract that evidences a residual
EI
another entity under conditions that are • interest in the assets of an entity after deducting
potentially favorable liabilities
• A contract that will or may be settled in the
entity’s own equity instruments EXAMPLES THAT ARE NOT
FINANCIAL ASSETS AND
LIABILITIES
DERIVATIVE • Physical assets
EXAMPLES OF FINANCIAL ASSETS AND
LIABILITIES
• Inventories
FINANCIAL INSTRUMENT OR OTHER CONTRACT • PPE
• Currency
• value changes in response to the change in a specified interest • Intangible assets
rate, financial instrument’s price, commodity price, foreign • A deposit with a bank
• Trade receivable accounts • Leased assets
exchange rate, index of prices or rates • Prepaid expenses
• it requires no initial net investment, or the investment is smaller • Trade payable accounts
than a similar response to changes in market factors • Loans and receivables
4
, Financial Instruments
To establish principles for the financial reporting
of financial assets and financial liabilities that will
present relevant and useful information to users
of financial statements for their assessment of
the amounts, timing and uncertainty of the
entity’s future cash flows. Presentation is to establish principles for
presenting financial instruments as
liabilities or equity and for offsetting
financial assets and financial liabilities.
IAS 32 prescribes requirements for:
Disclosures is to require entities to provide disclosures
• presentation of financial instruments as liabilities
in their financial statements that enable users to
or equity;
evaluate:
• offsetting financial assets and liabilities;
• the significance of financial instruments for the
• classification of financial instruments into financial
entity's financial position and performance; and
assets, financial liabilities and equity instruments;
• the nature and extent of risks arising from financial
• classification of related interest, dividends, losses
instruments to which the entity is exposed during
and gains; and
the period and at the reporting date, and how the
• circumstances in which financial assets and
entity manages those risks.
financial liabilities should be offset.
3
, FL
FINANCIAL LIABILITY
FINANCIAL INSTRUMENT IS ANY LIABILITY THAT:
• Has a contractual liability
is any contract that gives rise to a financial • To deliver cash or another financial asset
asset of one entity and a financial liability to another entity
Financial Instruments
or equity instrument of another entity. • To exchange financial assets or liabilities
with another entity under conditions
that are potentially unfavorable to the
FA
FINANCIAL ASSET
entity
IS ANY ASSET THAT: • A contract that will or may be settled in the
• Is cash entity’s own equity instruments
• Is an equity instrument of another entity
• Has a contractual right
• To receive cash or another financial asset
from another entity
• To exchange financial assets or liabilities with
EQUITY INSTRUMENT
• Any contract that evidences a residual
EI
another entity under conditions that are • interest in the assets of an entity after deducting
potentially favorable liabilities
• A contract that will or may be settled in the
entity’s own equity instruments EXAMPLES THAT ARE NOT
FINANCIAL ASSETS AND
LIABILITIES
DERIVATIVE • Physical assets
EXAMPLES OF FINANCIAL ASSETS AND
LIABILITIES
• Inventories
FINANCIAL INSTRUMENT OR OTHER CONTRACT • PPE
• Currency
• value changes in response to the change in a specified interest • Intangible assets
rate, financial instrument’s price, commodity price, foreign • A deposit with a bank
• Trade receivable accounts • Leased assets
exchange rate, index of prices or rates • Prepaid expenses
• it requires no initial net investment, or the investment is smaller • Trade payable accounts
than a similar response to changes in market factors • Loans and receivables
4
