Cash equivalents are defined as 'short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value'. IAS 7 does not define 'short-term'. What is the normal interpretation of 'short term' in this context? a- An item with significant risk of changes in value and the purpose of meeting current cash commitments b- An initial maturity of more than three months which can subsequently reduce to less than three months c- A short maturity of three-months or less d- All of them
Cash equivalents are defined as 'short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value'. IAS 7 does not define 'short-term'. What is the normal interpretation of 'short term' in this context? a- An item with significant risk of changes in value and the purpose of meeting current cash commitments b- An initial maturity of more than three months which can subsequently reduce to less than three months c- A short maturity of three-months or less d- All of them
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Cash equivalents are defined as 'short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value'. IAS 7 does not define 'short-term'. What is the normal interpretation of 'short term' in this context?
a- An item with significant risk of changes in value and the purpose of meeting current cash commitments
b- An initial maturity of more than three months which can subsequently reduce to less than three months
c- A short maturity of three-months or less
d- All of them
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