2.

Define Financial Asset and Financial Liability and list down the difference between the two

Financial Asset

a. Liquid asset such as cash

b. A contractual right to receive or claim cash

c. A contractual right to exchange financial instrument with another entity under conditions that are
potentially favorable

d. An equity instrument of another entity

Financial Liability

a. A contractual obligation

b. To deliver cash or another financial asset to another entity

c. To exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the entity

d. A contract that will or may be settled in the entity's own equity instruments

Give at least 3 differences between Financial Asset and Financial Liability

1. Financial asset is a c contractual right to receive or claim cash while financial liability is a contractual
to pay or deliver cash.

2. Financial asset may exchange financial instrument with another entity under conditions that are
potentially favorable while in financial liability are potentially unfavorable.

3. Financial asset is a benefit of an entity while financial is a settlement for financial asset
What is Fair Value (Based on PFRS13.)

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date (an exit price).

What is transaction cost?

Transaction costs are expenses incurred when buying or selling a good or service.

What is the initial measurement for FVTPL/ FVTOCI?

Transaction FVTPL FVTOCI What is the main

difference?

Initial Measurement Fair value or Fair value or In FVTOCI you have

Acquisition cost Acquisition cost + the transaction cost
Transaction cost while in FVTPL should
not be included