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meaning of Financial asset carried at amortised cost in regard to Financial instruments chapter?
Replies (1)
In simple words.. where we have the contractual right to receive the principal + interest amount both.( that is debt investment only)
investment in equity and another derivate instrument is not included in the definition of financial asset which is carried at amortised cost because CCFT and SPPI test are fail.
Is any asset
I) Cash
II) an equity instrument of another entity
III) a contractual right:
* to receive cash or another financial asset
from another entity
* any exchange that are potential favourable
to the entity
investment in equity and another derivate instrument is not included in the definition of financial asset which is carried at amortised cost because CCFT and SPPI test are fail.
Is any asset
I) Cash
II) an equity instrument of another entity
III) a contractual right:
* to receive cash or another financial asset
from another entity
* any exchange that are potential favourable
to the entity
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