T13 Financial Instruments

Question 1

What are financial Instruments?

Answer 1

1.) Financial Assets - Equity Instrument & Debt Instrument.
2.) Financial liabilities -

Question 2

If you had the following Shareholding of a company, what would you record them as?
>50%
>20% - <50%
<20%

Answer 2

1.) Subsidary
2.) Associate
3.) Investment

Question 3

Explain Equity instruments

Answer 3

This when we give out something from our company e.g finance. We know if it is an equity instrument because it will be in the equity in the other companies account an example of the this is us buying shares in another question.

Question 4

Explain debt instrument

Answer 4

This when we give out something from our company e.g finance. We know if it is an debt instrument because it will be in the liability section in the other companies accounts an example of the this is us buying shares in another question.

Question 5

Where does a change in value go on the accounts?

Answer 5

In the Profit and loss, more specifically, Gain/Loss in financial instrument.

Question 6

What are issue or transcation cost?

Answer 6

The fee and middle agent takes when buying or selling shares.

Question 7

What are convertible loans?

Answer 7

They are also known as Compound instrument, the lender can opt to take shares instead of the settlement back, The interest is usually cheaper.