Financial instrument

Financial instruments are tradable assets of any kind.They can be cash, evidence of an ownership interest in anentity, or a contractual right to receive or deliver cash oranother financial instrument.International Accounting Standards IAS 32 and 39 definea financial instrument as “any contract that gives rise toa financial asset of one entity and a financial liability orequity instrument of another entity”.[1]

1 Types

Financial instruments can be either cash instruments orderivative instruments:

• Cash instruments —instruments whose value is de-termined directly by the markets. They can besecurities, which are readily transferable, and instru-ments such as loans and deposits, where both bor-rower and lender have to agree on a transfer.

• Derivative instruments —instruments which de-rive their value from the value and characteris-tics of one or more underlying entities such asan asset, index, or interest rate. They can beexchange-traded derivatives and over-the-counter(OTC) derivatives.[2]

Alternatively, financial instruments may be categorizedby “asset class” depending on whether they are equitybased (reflecting ownership of the issuing entity) or debtbased (reflecting a loan the investor has made to the issu-ing entity). If it is debt, it can be further categorised intoshort term (less than one year) or long term. Foreign ex-change instruments and transactions are neither debt norequity based and belong in their own category.Some instruments defy categorization into the above ma-trix, for example repurchase agreements.

2 Measuring gain or loss

The gain or loss on a financial instrument is as follows:

3 See also• Off-balance-sheet issues

4 References[1] International Accounting Standard (IAS) 32.11

[2] Understanding Derivatives. Federal Reserve Bank ofChicago. Accessed August 2, 2015.

5 External links• IFRS List – The online community about IFRS/IASand Auditing

• Understanding Derivatives: Markets and Infrastruc-ture Federal Reserve Bank of Chicago, FinancialMarkets Group

• Financing Instruments

• Accounting Homework Help

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2 6 TEXT AND IMAGE SOURCES, CONTRIBUTORS, AND LICENSES

6 Text and image sources, contributors, and licenses

6.1 Text• Financial instrument Source: https://en.wikipedia.org/wiki/Financial_instrument?oldid=674296607 Contributors: Secretlondon, Sky-fire, DocWatson42, Jthiesen, Xwu, Mervynl, Donfeliz, Comatose51, Gadfium, Smiller933, D6, Rich Farmbrough, RJHall, Maurreen,Jerryseinfeld, Kjkolb, Alansohn, Gary, Nealcardwell, Danhash, SDC, Feco, YurikBot, Htournyol, NawlinWiki, Aeusoes1, Armadni-General, Wknight94, Carabinieri, DocendoDiscimus, Sardanaphalus, Reedy, Bomac, Ppntori, Chris the speller, Simon123, Zoonfafer,Wiki me, Easwarno1, Bhludzin, Kuru, Chhajjusandeep, JohnLai, Jarl Friis, VolkovBot, Kakoui, Happyzone, IFRS303, SieBot, Klk206,Nopetro, Kobakoba1974, Mrfebruary, MenoBot, ClueBot, Ewawer, PixelBot, Salvi.simone, Olaffpomona, Alexius08, MystBot, Ad-dbot, Kongr43gpen, Cst17, Chzz, Numbo3-bot, Zorrobot, Yobot, Aldo samulo, Amaury, FrescoBot, Gene-va, Taweetham, Arbraxan,Kmw2700, EmausBot, WikitanvirBot, Josve05a, L Kensington, ClueBot NG, Littletinypud, Firetinder, Fancitron, YFdyh-bot, Luvonean-other, Yamaha5, WPGA2345, Faizan ali 01 and Anonymous: 73

6.2 Images• File:CDS_volume_outstanding.png Source: https://upload.wikimedia.org/wikipedia/commons/9/93/CDS_volume_outstanding.png Li-cense: CC BY-SA 3.0 Contributors: Own work Original artist: MartinD

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