Cash equivalents: Difference between revisions
imported>Doug Williamson (Add liquidity management context to second definition.) |
imported>Doug Williamson (Add links.) |
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Cash equivalents generally mature within three months compared to short-term investments that mature in 12 months and long-term investments that mature in over 12 months. | Cash equivalents generally mature within three months compared to short-term investments that mature in 12 months and long-term investments that mature in over 12 months. | ||
Relevant accounting standards include ASC 230 under US GAAP, and IAS 7 under IFRS. | |||
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==See also== | ==See also== | ||
*[[ASC 230]] | |||
* [[Assets]] | * [[Assets]] | ||
* [[Balance sheet]] | * [[Balance sheet]] | ||
*[[Broad money]] | |||
*[[Cash]] | *[[Cash]] | ||
*[[Cash and cash equivalents]] | *[[Cash and cash equivalents]] | ||
*[[ | *[[Cash flow statement]] | ||
*[[Commercial paper]] | *[[Commercial paper]] | ||
*[[IAS 7]] | *[[IAS 7]] | ||
*[[International Financial Reporting Standards]] (IFRS) | |||
*[[Liquidity]] | *[[Liquidity]] | ||
*[[Liquidity management]] | *[[Liquidity management]] | ||
*[[Money]] | |||
*[[Money market]] | *[[Money market]] | ||
*[[Narrow money]] | |||
*[[Near cash]] | *[[Near cash]] | ||
*[[Statement of financial position]] | *[[Statement of financial position]] | ||
*[[Treasury bills]] | *[[Treasury bills]] | ||
*[[US GAAP]] | |||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Latest revision as of 19:07, 12 February 2023
1. Financial reporting - balance sheet - assets.
For financial reporting purposes, cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Examples of cash equivalents for financial reporting purposes include money market instruments, treasury bills, short-term government bonds, marketable securities and commercial paper.
Cash equivalents generally mature within three months compared to short-term investments that mature in 12 months and long-term investments that mature in over 12 months.
Relevant accounting standards include ASC 230 under US GAAP, and IAS 7 under IFRS.
2. Liquidity management.
Outside the financial reporting context, the term 'cash equivalents' is also used more loosely, and may include fewer, or more, assets than those defined strictly above.
