What are financial assets in public sector accounting?
What are financial assets in public sector accounting?
Financial assets are not new to the public sector. For many years, cash, bank deposits, and accounts receivable (money owed to an entity but not yet received) have been used to manage the flow of cash through the entity. Also, targeted funds (cash deposits and shares) have been set aside to meet future liabilities.
How do you classify financial instruments?
Financial instruments may be divided into two types: cash instruments and derivative instruments.
- Cash Instruments.
- Derivative Instruments.
- Debt-Based Financial Instruments.
- Equity-Based Financial Instruments.
Is gold bullion a financial instrument?
All monetary gold is included in reserve assets or is held by international financial organizations. Except in limited institutional circumstances when reserve assets may be held by other institutions, gold bullion can be a financial asset only for the central bank or central government.
Why is gold not a financial instrument?
Similar to gold bullion, monetary gold is not a financial instrument as there is no contractual right to receive cash or another financial asset inherent in the item.
Is cash a financial instrument?
Cash Instruments Cash instruments are financial instruments with values directly influenced by the condition of the markets. Within cash instruments, there are two types; securities and deposits, and loans.
What are the three basic types of financial assets?
Money, stocks and bonds are the main types of financial assets. Each is something you can own, and each has some amount of financial value.
What are basic financial instruments?
Basic financial instruments are defined as one of the following: cash. a debt instrument (such as accounts receivable and payable) commitment to receive a loan that satisfy certain criteria. investments in non-convertible preference shares, and non puttable ordinary shares.
Do accounting standards on Financial Instruments apply to public sector organizations?
PSAB needs to assess how and to what extent the CICA Handbook – Accounting standards on financial instruments should apply to public sector organizations. Transactions involving financial instruments are often complex. The variety of financial instrument products is growing and becoming more sophisticated.
Why do governments and government organizations use financial instruments?
With the growth and availability of financial instruments, many governments and government organizations use financial instruments to manage their financial exposure such as foreign currency and interest rate risk.
What is public sector guideline psg-6?
PSAB issued Public Sector Guideline PSG-6, Including Results of Organizations and Partnerships Applying Fair Value Measurement, to provide guidance for governments in consolidating government organizations (including government business enterprises) that follow the CICA Handbook – Accounting.
What financial instruments are covered by the guidance in the PSA?
The guidance provided in the PSA Handbook on financial instruments is limited to derivative financial instruments used for hedging of foreign currency items in Section PS 2600, Foreign Currency Translation.
