What are the basic financial instruments section 11? (2024)

What are the basic financial instruments section 11?

For the purposes of Section 11, basic financial instruments consist of: • cash; • debt instruments (such as an account, note, or loan receivable or payable) that meet certain conditions (in particular, returns to the holder are either fixed or are variable on the basis of a single referenced quoted or observable ...

(Video) IFRS For SME Section 11 Basic Financial Instruments Introduction
(SA Accounting Academy - SAAA)
What are basic financial instruments?

The most common basic financial instruments are cash, trade debtors, trade creditors and most bank loans. For a debt instrument (receivable or payable) to be basic, returns to the holder must be: •a fixed amount; •a positive fixed rate or a positive variable rate; or.

(Video) Financial Instruments - Basic Concepts
(Raise Your Acumen)
What are the sections 11 and 12 of FRS 102 in respect of financial instruments?

FRS 102 Section 11 Basic Financial Instruments and Section 12 Other Financial Instruments Issues set out the requirements for the recognition, derecognition, measurement and disclosure of financial assets and financial liabilities. Section 12 includes the requirements for derivatives and hedge accounting.

(Sir AJ Cresmundo)
What are the measurements for financial instruments in FRS 102?

The subsequent measurement requirements for financial instruments are outlined in FRS 102:11.14–11.26. In summary, basic financial instruments are measured either at amortised cost, fair value through profit or loss or at cost less impairment.

(Video) FAR. Introduction to Basic Financial Instruments (Presentation Credit to Sir Jekell Salosagcol)
(Dean CJ Formaran Accounting Lectures)
What are classified as financial instruments?

Basic examples of financial instruments are cheques, bonds, securities. There are typically three types of financial instruments: cash instruments, derivative instruments, and foreign exchange instruments.

(Video) Accounting for Financial Instruments - Part 1/11
What is the most basic financial instrument?

Sec. 4. Cash and other Financial Assets.

Cash is the most basic financial instrument because it is the medium of exchange and is the basis on which all transactions are measured and recognized in the financial statements.

(Video) Financial instruments
(Mercia Group Ltd)
What is Section 11 and 12 of FRS 102?

Sections 11 and 12 Basic and Other Financial Instruments

An entity that applies the recognition and measurement principles of IAS 39 or IFRS 9 is required only to comply with the disclosure requirements of FRS 102 and not those of IFRS 7 Financial Instruments: Disclosures.

(Video) Accounting for Financial Instruments - Part 11/11
What is FRS 11?

C. urrently, Financial Reporting Standard (FRS) 11 Construction Contracts describes the accounting treatment of revenue and costs associated with construction contracts.

(Video) Financial instruments – Introduction - ACCA SBR lecture
What is Section 12 other financial instrument issues?

Section 12 applies to other, more complex financial instruments and transactions. If an entity enters into only basic financial instrument transactions then Section 12 is not applicable. However, even entities with only basic financial instruments shall consider the scope of Section 12 to ensure they are exempt.

(Video) 2022 TL105 Part 2 - Pre - trade expenses (section 11A)
What is the difference between FRS 102 and FRS 102 Section 1A?

FRS 102 Section 1A provides reduced disclosures for small entities that meet the conditions specified below and therefore do not have to follow the detailed disclosures specified in Sections 4 to 35 of FRS 102.

(Video) Essentials of Investments Chapter 2 Financial Instruments
(Michael Nugent)

What is the difference between financial instruments FRS 102 and IFRS?

Under IFRS, the standard allows the company to choose between holding the investment property at depreciated cost or at fair value with changes recognised in the profit or loss. Whereas under FRS 102, investment property must be measured at fair value if it can be reliably determined.

(Video) Accounting for Financial Instruments - Part 10/11
How are financial instruments initially measured?

Initial measurement of financial instruments

Under IFRS 9 all financial instruments are initially measured at fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs.

What are the basic financial instruments section 11? (2024)
What are the primary statements under FRS 102?

Financial statements must include a statement of comprehensive income (or pair of statements with the same effect, as discussed later), a statement of financial position, a statement of changes in equity, and a statement of cashflows, as well as supporting notes.

What is not considered a financial instrument?

The following are examples of items that are not financial instruments: intangible assets, inventories, right-of-use assets, prepaid expenses, deferred revenue, warranty obligations (IAS 32. AG10-AG11), and gold (IFRS 9.

What is a financial instrument and examples?

In simple words, any asset which holds capital and can be traded in the market is referred to as a financial instrument. Some examples of financial instruments are cheques, shares, stocks, bonds, futures, and options contracts.

What is the difference between financial assets and instruments?

Financial instruments are contracts which give rise to a financial asset for one entity and a financial liability or equity instrument for another entity.

What are the most complicated financial instruments?

Complex financial instruments include derivatives (such as options and warrants, forwards, and futures) and hybrid/compound instruments (such as convertible debt, debt with detachable warrants, and perpetual debt).

Is cash a debt instrument?

Cash is the definition of liquid and inherently provides no return - you could earn interest on cash by depositing it in a bank but then you are creating a debt obligation in effect - the cash inherently, as in cash in a physical safe, generates zero return nominal by definition.

Is a security a financial instrument?

A security, in a financial context, is a certificate or other financial instrument that has monetary value and can be traded. Securities are generally classified as either equity securities, such as stocks and debt securities, such as bonds and debentures.

What does FRS 102 say?

Under FRS 102, at least one entity has to apply defined benefit accounting in its individual financial statements, depending on the policy for recharging pension costs within the group.

What is Section 13 of FRS 102?

FRS 102 Section 13 Inventories sets out the requirements that apply to the measurement and recognition of inventories (or stock and work in progress), and sets out the types of costs that should be included in the value of inventories.

What is FRS 102 paragraph 12?

FRS 102:12 covers all instruments that meet the definition of a financial asset or financial liability but are not either addressed by FRS 102:11 or explicitly scoped out of FRS 102:12.

What is the difference between ASC 842 and FRS 102?

ASC 842 and IFRS 16 both recognise an asset and liability for all leases whereas FRS 102 only recognises an asset and liability for finance leases.

What is the purpose of FRS 102?

FRS 102 is designed to apply to the general purpose financial statements and financial reporting of entities including those that are not constituted as companies and those that are not profit-oriented.

What are biological assets under FRS 102?

Biological assets and agricultural produce are dealt with in FRS 102:34, together with various other specialised activities. They give rise to issues of cost determination which are very different to those that generally arise with other types of inventory.


You might also like
Popular posts
Latest Posts
Article information

Author: Reed Wilderman

Last Updated: 24/04/2024

Views: 6067

Rating: 4.1 / 5 (52 voted)

Reviews: 83% of readers found this page helpful

Author information

Name: Reed Wilderman

Birthday: 1992-06-14

Address: 998 Estell Village, Lake Oscarberg, SD 48713-6877

Phone: +21813267449721

Job: Technology Engineer

Hobby: Swimming, Do it yourself, Beekeeping, Lapidary, Cosplaying, Hiking, Graffiti

Introduction: My name is Reed Wilderman, I am a faithful, bright, lucky, adventurous, lively, rich, vast person who loves writing and wants to share my knowledge and understanding with you.