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Can you explain Financial Instrument in simple definition?

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Question added by Asim kuddoos , Accounts Adviser , Apeiron Accounting & Book-keeping LLC.
Date Posted: 2016/05/11
Wasim khan wazir
by Wasim khan wazir , Finance Specialist , Mott Macdonald

According to IFRS 9 A financial instrument is a contract that give rise to financial asset of one company and financial liability or equity instruments of another company. 

Ahmed Farouk Ismail Mobarak
by Ahmed Farouk Ismail Mobarak , Group CFO , Korek Telecom

IAS 32 Financial Instruments: Presentation outlines the accounting requirements for the presentation of financial instruments, particularly as to the classification of such instruments into financial assets, financial liabilities and equity instruments. The standard also provide guidance on the classification of related interest, dividends and gains/losses, and when financial assets and financial liabilities can be offsetaaa

Frank Mwansa
by Frank Mwansa , ACCOUNTING LECTURER , FREELANCER

Thanks for invitation

Financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. for example when an invoice is issued on the sale of goods on credit the entity that has sold the goods has a financial asset- the receivable while the buyer has to account for a financial liability- the payable.

georgei assi
by georgei assi , مدير حسابات , المجموعة السورية

Jamil question, I thank him for the simple but complex and of interest to all professionals in the financial affairs

Financial instruments are negotiable instruments or trade which is one of the assets of any kind, whether in cash or evidence of ownership of the entity, or a contractual right to receive or deliver, cash or other financial instrument.

In accordance with international standards for financial reporting No. 32 and 39, and is defined as "any contract that gives a certain financial assets and financial responsibility for the entity or equity instrument of another entity."

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