Financial instruments

Question 1

Recognition and derecognition IFRS 9 covers

Answer 1

Assets and liabilities

Question 2

IAS 32 definition of:

Financial instrument 
Asset
Liability 
Equity 
Derivative

Answer 2

Financial instrument = any contract which gives rise to both an asset of one entity and a liability or equity for another.
Asset = cash, investment in another entity, a contractual right to receive cash or another asset.
Liability = contractual obligation to deliver cash or another asset.
Equity = residual interest in the assets of an entity after deducting all of its liabilities
Derivative = has 3 characteristics:
a) value changes in response to a variable (share price)
b) no or little initial net investment
c) settled at a future date