Which of the following items are regarded as a financial liability?
A) ordinary shares held in another entity;
B) a contract that is a non-derivative for which the entity is obliged to deliver a variable number of its own equity instruments;
C) a contractual right to exchange under potentially favourable conditions, an option to purchase shares below the market price;
D) the right of a depositor to obtain cash from a financial institution with which it has deposited cash.

Question

Quizplus · Accepted Answer

DB) A contract that obliges an entity to deliver a variable number of its own equity instruments is considered a financial liability because it represents an obligation to deliver economic resources. D) The right of a depositor to obtain cash from a financial institution represents a financial liability for the institution, as it is obligated to deliver cash upon request.

Which of the Following Items Are Regarded as a Financial