Page 57 - F2 Integrated Workbook STUDENT 2019
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Financial instruments





                          What are financial instruments?





                                1.1  Definitions of financial instruments

                                ‘A financial instrument is any contract that gives rise to a
                                financial asset of one entity and a financial liability or equity
                                instrument in another entity.’ (IAS 32 para 11)

                                Still not sure what a financial instrument actually is?

                                Think of them as anything that is used in financing a business e.g.
                                loans, shares.









                                                                           Anything that is used in
                Anything that is used in

                PROVIDING finance =                                        RAISING finance =
                                                                           FINANCIAL LIABILITY
                   FINANCIAL ASSET
                                                                           OR EQUITY




































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