Financial assets

[TrueTears]

Hi, can someone explain to me what financial assets are? (Examples would be good too!)

[*ryan777*]

Hi, can someone explain to me what financial assets are? (Examples would be good too!)

is it just an asset?
but the term "financial asset" brings to mind cash, shares etc

[TrueTears]

nah I don't get the book's definition on page 194 chapter 5, in fact they don't even give a definition ><

[*ryan777*]

the "intangible assets"?

[TrueTears]

fk i mean pg 192 LOl sorry!!

[*ryan777*]

oh ok, sorry not having heard about it i cant really explain any better than the book atm

have u already read up to chapter 5? ...impressive

[TrueTears]

lol yeah i've been reading a lot of accounting and micro recently, up to about chapter 5 for both.

lucky i didn't skip to any year 2 maths units haha coz now i don't have to do any maths hehe

[*ryan777*]

lol, ive been finding myself at least glancing throught the accounting book during my long long train rides
i never thought id actually enjoy accounting as much as i am now....

btw, what group are you in for the group oral presentation?
and did your tutor say u gotta wear a suit?

[TrueTears]

lol yeah accounting is fun so is micro

im in group 5 and we present in week 3

nah he didn't say anything about clothes

[*ryan777*]

lol my AFC1000 tutor likes to remind us of what to wear, starting to feel like he just wants us to be loled at by everyone else on campus for overdressing

btw, whats the "economics experiment" next week in ECC1000 tute?

[nbalakers24]

financial assets i would assume to be non-physical like shares, prepaid expenses?

thats just a guess though.

[ReVeL]

financial assets i would assume to be non-physical like shares, prepaid expenses?

Yeah this is correct. Things like bank balances, securities etc. all come under the umbrella of non-physical and can be labelled Financial Assets. Physical includes actual "touchable" objects like equipment or buildings.

EDIT: Badly phrased.

[TrueTears]

Hmm, I still don't quite get what financial assets are... are they a subset of current assets? What is the definition (criteria) for something to be a financial asset?

[ReVeL]

They are a subset of Total Assets, because it is just one form an asset can take, and it need not necessarily be current. Other types of assets include physical, intagible etc. As far as definitions, it's been a while since I've done this stuff, but a quick search found:

Financial assets are economic assets, comprising means of payment, financial claims and economic assets which are close to financial claims in nature.

(Source)

Probably not a lot of help, but just think along the lines of assets that do not have a physical form.

I wouldn't worry about this detail stuff too much TT, I think the main thing is to distinguish between physical and non-physical assets. Sorry I couldn't explain it better, maybe someone else has a better definition.

[Fyrefly]

AASB 132, para. 11:

"A financial asset is any asset that is:

(a) cash;
(b) an equity instrument of another entity;
(c) a contractual right:
(i) to receive cash or another financial asset from
another entity; or
(ii) to exchange financial assets or financial
liabilities with another entity under conditions
that are potentially favourable to the entity; or
(d) a contract that will or may be settled in the entity’s
own equity instruments and is:
(i) 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
(ii) a derivative that will or may be settled other
than by the exchange of a fixed amount of cash
or another financial asset for a fixed number of
the entity’s own equity instruments. For this
purpose the entity’s own equity instruments do
not include puttable financial instruments
classified as equity instruments in accordance
with paragraphs 16A and 16B, instruments that
impose on the entity an obligation to deliver to
another party a pro rata share of the net assets
of the entity only on liquidation and are
classified as equity instruments in accordance
with paragraphs 16C and 16D, or instruments
that are contracts for the future receipt or
delivery of the entity’s own equity instruments.

...

An equity instrument is any contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities."