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- Cash equivalents are short-term, highly liquid assets that can readily be converted into known amounts of cash and with little risk of price fluctuations.
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May 31, 2024 · Cash and cash equivalents refers to the line item on the balance sheet that reports the value of a company's assets that are cash or can be converted into cash immediately.
Jul 16, 2024 · IAS 7 defines cash equivalents as 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.
If the reporting entity can access the cash or cash equivalents without any legal or contractual consequence (i.e., there is no requirement that the specific cash or cash equivalent be set aside for remittance), the cash or cash equivalent is likely not legally restricted.
Cash equivalents are short-term, highly liquid assets that can readily be converted into known amounts of cash and with little risk of price fluctuations. An example of a short- term cash equivalent asset would be one that matures in three months or less from the acquisition date.
Jul 31, 2023 · Cash equivalents are highly liquid investment securities that can be converted to cash easily and are found on a company's balance sheet.
Jun 24, 2024 · Try for Free. What is cash equivalents? Cash equivalents refer to highly liquid investments that are readily convertible into cash and have a short maturity period. In the field of accounting, cash equivalents are classified as assets that are held by a company and can be used to meet short-term cash requirements.
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Cash equivalents typically have a short maturity period, usually three months or less. Examples of cash equivalents include treasury bills, money market funds, and short-term government bonds. Companies report their Cash and Cash Equivalents to provide insights into their liquidity position.