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Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership, interest in an entity or a contractual right to receive or deliver in the form of currency (forex); debt (bonds, loans); equity (); or derivatives (options, futures, forwards).
IFRS 9 began as a joint project between IASB and the Financial Accounting Standards Board (FASB), which promulgates accounting standards in the United States. The boards published a joint discussion paper in March 2008 proposing an eventual goal of reporting all financial instruments at fair value, with all changes in fair value reported in net income (FASB) or profit and loss (IASB). [1]
IAS 39: Financial Instruments: Recognition and Measurement was an international accounting standard which outlined the requirements for the recognition and measurement of financial assets, financial liabilities, and some contracts to buy or sell non-financial items.
Directors can not make heads or tails of IFRS financial statements; IFRS financial statements do not reflect the business model; Financial instruments are stated at "full fair value", thereby maximizing earnings volatility. The "fair value" is always defined as "market value" even when markets are illiquid.
Derivatives are one of the three main categories of financial instruments, the other two being equity (i.e., stocks or shares) and debt (i.e., bonds and mortgages). The oldest example of a derivative in history, attested to by Aristotle , is thought to be a contract transaction of olives , entered into by ancient Greek philosopher Thales , who ...
IFRS 7, titled Financial Instruments: Disclosures, is an International Financial Reporting Standard (IFRS) published by the International Accounting Standards Board (IASB). It requires entities to provide certain disclosures regarding financial instruments in their financial statements. [ 1 ]
The money market is a component of the economy that provides short-term funds. The money market deals in short-term loans, generally for a period of a year or less. As short-term securities became a commodity, the money market became a component of the financial market for assets involved in short-term borrowing, lending, buying and selling with original maturities of one year or less.
ISO 10962, known as Classification of Financial Instruments (CFI), is a six-letter-code used in the financial services industry to classify and describe the structure and function of a financial instrument (in the form of security or contract) as part of the instrument reference data.