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Unformatted text preview: MEMO Date: February 3, 2010 To: Professor Crowley From: Aya Kurehara Summary of Chapter 6: Financial instruments Introduction to IAS 32 and 39 IAS 32 sets out the definitions of financial assets, liabilities and equity instruments and prescribes detailed disclosures. IAS 39 includes procedures for the recognition and measurement of financial instruments. One of the most controversial development areas in recent times, especially hedge accounting IAS 32 Financial Instruments: Disclosure and Presentation IAS 32 defines a financial instrument as any contract causing a financial asset for one entity and a financial liability or equity instrument for another entity. Financial assets are defined from holders perspective. Financial liabilities and equity are defined from issuers perspective. Equity instrument is defined as any contract that results in the entity retaining a residual interest in assets after deducting all liabilities. Financial instrument include primary instruments such as cash, receivables, investments, liabilities....
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- Spring '10