Financial asset and Principal: Difference between pages

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A financial asset is an asset whose value is dependent on the obligation of another person or entity.
#In agency law, an individual or other legal person represented by an agent.
#In law, a legal person acting on their own behalf.
#The amount of an investment or a loan, excluding any interest. When the whole of a loan is drawn down at the start, the principal is simply the amount originally borrowed.
#The reference amount of a traded financial instrument, used to determine its future cashflows.
#Most important, or largest.  




IAS 32 defines a financial asset as an asset that is <u>any of</u> the following:
The concepts of 'principal' above, should not be confused with ''principle'', which is different.
 
 
 
'''1.''' Cash; <u>or</u>
 
 
'''2.''' An equity instrument of another entity; <u>or</u>
 
 
'''3.''' A contractual right to:
*Receive cash or another financial asset from another entity; <u>or</u>
*Exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the reporting entity; <u>or</u>
 
 
'''4.''' A contract that will or may be settled in the reporting entity's own equity instruments and is <u>either</u>:
*A non-derivative for which the entity is or may be obliged to receive a variable number of the entity's own equity instruments; <u>or</u>
*A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity's own equity instruments.




== See also ==
== See also ==
* [[Amortised cost]]
* [[Acceleration]]
* [[Assets]]
* [[Agency]]
* [[Financial instrument]]
* [[Agent]]
* [[Financial liability]]
* [[Arm’s length principle]]
* [[IAS 32]]
* [[Coupon rate]]
* [[Dual currency bond]]
* [[Endowment]]
* [[Foreign currency bond]]
* [[Forward forward contract]]
* [[Interest]]
* [[Non-performing loan]]
* [[Paying agent]]
* [[Point]]
* [[Self-financing loan]]
* [[Separate personality principle]]
* [[Annuity factor]]
* [[Instalment]]

Revision as of 05:53, 22 August 2017

  1. In agency law, an individual or other legal person represented by an agent.
  2. In law, a legal person acting on their own behalf.
  3. The amount of an investment or a loan, excluding any interest. When the whole of a loan is drawn down at the start, the principal is simply the amount originally borrowed.
  4. The reference amount of a traded financial instrument, used to determine its future cashflows.
  5. Most important, or largest.


The concepts of 'principal' above, should not be confused with principle, which is different.


See also