COMM 353 Lecture Notes - Lecture 7: Voting Interest, Financial Instrument, Financial Statement
Document Summary
Definition: those based on contractual agreements relating to future cash flows. Items such as equipment, land, buildings, and inventory are typically called. The difference between financial and real assets: whether there is a counterparty . A financial asset appears on the left-hand side of the balance sheet of the investor; a similar item should be on the right hand side of the balance sheet of the counterparty as a liability or equity. A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity: overview of financial asset classification. Equity: equity instrument: a contract that gives the holder the residual interest in an entity after deducting all of its liabilities, such as a common share. Its value changes according to a specified variable, such as an interest rate, stock price and so on.
