A financial asset is recognized when:

1. Risks and rewards are transferred: This means that the entity has either accepted to take on the risks or stands to gain the rewards associated with the asset. This is usually the case when the entity has bought the asset and now holds it.

2. It is probable that future economic benefits will flow to the entity and the cost of the instrument can be measured reliably: This means that the entity expects to gain financially from the asset in the future and that the cost of the asset can be accurately determined.

3. Control is obtained: This means that the entity has the ability to direct the use of the asset and obtain the benefits from it. This is usually the case when the entity has the power to sell or transfer the asset.

4. The entity becomes a party to a contractual provision of the instrument: This means that the entity has entered into a contract regarding the asset. This could be a contract to buy or sell the asset, or a contract that gives the entity some other right or obligation related to the asset.

Question

A financial asset is recognized when:

1. Risks and rewards are transferred: This means that the entity has either accepted to take on the risks or stands to gain the rewards associated with the asset. This is usually the case when the entity has bought the asset and now holds it.

2. It is probable that future economic benefits will flow to the entity and the cost of the instrument can be measured reliably: This means that the entity expects to gain financially from the asset in the future and that the cost of the asset can be accurately determined.

3. Control is obtained: This means that the entity has the ability to direct the use of the asset and obtain the benefits from it. This is usually the case when the entity has the power to sell or transfer the asset.

4. The entity becomes a party to a contractual provision of the instrument: This means that the entity has entered into a contract regarding the asset. This could be a contract to buy or sell the asset, or a contract that gives the entity some other right or obligation related to the asset.

Knowee AI · Accepted Answer

A financial asset is recognized when:

1. Risks and rewards are transferred: This means that the entity has either accepted to take on the risks or stands to gain the rewards associated with the asset. This is usually the case when the entity has bought the asset and now holds it.

2. It is probable that future economic benefits will flow to the entity and the cost of the instrument can be measured reliably: This means that the entity expects to gain financially from the asset in the future and that the cost of the asset can be accurately determined.

3. Control is obtained: This means that the entity has the ability to direct the use of the asset and obtain the benefits from it. This is usually the case when the entity has the power to sell or transfer the asset.

4. The entity becomes a party to a contractual provision of the instrument: This means that the entity has entered into a contract regarding the asset. This could be a contract to buy or sell the asset, or a contract that gives the entity some other right or obligation related to the asset.

A financial asset is recognised whenAnswer : risks and rewards are transferred it is probable that future economic benefits will flow to the entity and the cost of the instrument can be measured reliably control is obtained the entity becomes a party to a contractual provision of the instrument

Question

Solution

Similar Questions

Upgrade your grade with Knowee