Financial Assets New

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Financial Assets New

  1. 1. Financial Assets
  2. 2. What Does Financial Asset Mean? • An asset that derives value because of a contractual claim is called financial asset. • Investopedia Says: Unlike land and property--which are tangible, physical assets--financial assets do not necessarily have physical worth. or Financial assets are non-physical assets those can be readily converted into cash like Bank balance, Shares, short-term investments, Treasury bills, commercial papers, bill receivables etc.
  3. 3. Or • Claims on real assets such as stocks and bonds etc are called financial assets. • Or • A financial asset is not tangible. Instead, its existence is "represented by evidence of its existence such as a paper certificate, like money, a savings passbook, a stock certificate, or a bond. The paper in money has no intrinsic value. Its value is derived by virtue of what it represents.
  4. 4. • Pieces of paper evidencing a claim on some issuer are called financial assets. • Or • A paper (or electronic) claim on some issuer is called financial assets.
  5. 5. What Does Real Asset Mean? • Real Assets are assets that are used to produce a good and/or service. It is also usually something you can touch, land, equipment, supplies, etc. • Or • A real asset is a tangible asset like gold or real estate. You can hold it or place your hand on it. It has intrinsic value in and of itself. • Or • Assets used to produce goods and services are called real assets. • Examples: factories, land, building, machinery etc.
  6. 6. What Does Marketable securities Mean? • Financial assets that are easily traded in organized market are called marketable securities. • Or • Very liquid securities that can be converted into cash quickly at a reasonable price are called marketable securities. • or • Readily tradable equity or debt security with quoted prices, are called marketable securities. • Examples of marketable securities include commercial paper, banker's acceptances, Treasury bills and other money market instruments. • It is a near-cash asset and is classified under current assets.

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