As per AS -30 prepaid expenses are not financial instruments.

Question

Quizplus · Accepted Answer

Prepaid expenses are not considered financial instruments according to AS-30 because they do not represent a contractual right to receive cash or another financial asset. Financial instruments are defined as any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Prepaid expenses, on the other hand, are payments made in advance for goods or services to be received in the future, and thus do not fit this definition.

As Per AS -30 Prepaid Expenses Are Not Financial Instruments