Archive / 1.02 Financial Assets

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Managing cash flows

When we discuss payment terms and managing cash flows we are faced to deal with the needs of our customers. I have had experience with companies who say that their customers ask for 6 month payment terms. 6 months! Imagine trying to accommodate your own business within the same cash supply timeframe and producing, paying […]

You got assets in a politically unstable country

I don’t want to go into too much detail of what’s happening in the world right now and whether something is right or wrong, but what I do want to stress is that such events do have their effect on accounting. Something to note is that the effect is only then there if you’re actually […]

Subsequent measurement of financial assets

When those financial assets (like cash, bank accounts, accounts and notes receivable etc) are initially recognized, at every balance sheet date they need to be again measured. They need to have a true and fair value on the balance sheet and it may not be the value it was initially recognized with. This is called […]

What are financial assets and how are they initially recognized?

One side of the balance sheet is called ‘assets’ and they consist of various types of assets – there are inventories, accounts receivables, cash, fixed and immaterial assets etc. When some are physical and touchable sort of speak, then others are without any physical substance. Financial instruments considered also as financial assets are those without […]

The value of bonds on the balance sheet

Simply put a bond is a form of financing and as such is an agreement to repay borrowed money with deemed interest (called ‘coupon’) intervals. So in essence bond could be considered also as a loan. However, note here that when loan payables are fairly easy to be recognized, bonds have a few things that […]