Financial asset

A financial asset is an asset whose value comes from a contractual claim. These assets are frequently traded. Financial assets include the following items:

  • Cash

  • Equity of another entity

  • A contractual right to receive cash or similar from another entity or a potentially favorable exchange of financial assets or liabilities with another entity

  • A contract probably to be settled in the entity's own equity and that is a nonderivative under which the entity may receive a variable amount of its own equity instruments, or a derivative that probably will be settled other than through the exchange of cash or similar for a fixed amount of the entity's equity.

Examples of financial assets are cash, investments in the bonds and equity issued by other entities, receivables, and derivative financial assets.

Related Courses

Accounting for Investments  
Bookkeeping Guidebook