ABSTRACT
This chapter discusses the accounting treatment, including the accounting entries and adjustments for each key category of financial instruments. It addresses the main issue that is: What is the difference in the accounting entries for the various financial instruments? The Investment Account reflects the procurement of the financial instrument and its subsequent amortisation over a period of two years. Accounting wise, loans and receivables are treated in a similar manner as held-to-maturity financial instruments, and as such are measured through amortised cost. Financial assets at fair value through profit and loss (FVTPL) are subdivided into two categories, namely financial assets designated on initial recognition at FVTPL and held for trading financial assets. Available for sale financial assets are a residual category for non-derivative financial assets. The chapter examines the accounting implications when purchasing and selling financial instruments. Generally, the accounting procedure for the ex-div financial instruments is opposite to the cum-div process.
