Financial Asset

A financial asset is an intangible asset that derives value because of a contractual claim. Examples include bank deposits, bonds, and stocks. Financial assets are usually more liquid than tangible assets, such as land or real estate, and are traded on financial markets. According to the International Financial Reporting Standards (IFRS), a financial asset is defined as one of the following:

  • Cash or cash equivalent;
  • Equity instruments of another entity;
  • 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;
  • 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.

Famous quotes containing the words financial and/or asset:

    ... aside from the financial aspect, [there] is more: the life of my work. I feel that is all I came into the world for, and have failed dismally if it is not a success.
    Mary E. Wilkins Freeman (1852–1930)

    When ... did the word “temperament” come into fashion with us?... whatever it stands for, it long since became a great social asset for women, and a great social excuse for men. Perhaps it came in when we discovered that artists were human beings.
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